Fundamentals of ABM 1

11
FUNDAMENTALS OF
ACCOUNTANCY,
BUSINESS AND
MANAGEMENT 1
First Quarter
LEARNING ACTIVITY SHEETS
i
COPYRIGHT PAGE
Learning Activity Sheet in Fundamentals of Accountancy,

Business and Management
Grade 11
Copyright @ 2020
DEPARTMENT OF EDUCATION
Regional Office No. 02 (Cagayan Valley)
Regional Government Center, Carig Sur, Tuguegarao City, 3500
“No copy of this materials shall subsist in any work of the Government of the Philippines.
However, prior approval of the government agency or office wherein the work is created shall be
necessary for exploitation of such work for profit.”
This material has been developed for the implementation of the K to 12 Curriculum through the
Curriculum and Learning Management Division (CLMD). It can be reproduced for educational
purposes and the source must be acknowledged. Derivatives of the work including creating an
edited version, an enhancement of supplementary work are permitted provided all original works
are acknowledged and the copyright is attributed. No work may be derived from the material for
commercial purposes and profit.
Consultants:
Regional Director ESTELA L. CARIŇO, EdD, CESO IV
Assistant Regional Director RHODA T. RAZON, EdD, CESO V
Schools Division Superintendent MADELYN L. MACALLING, PhD, CESO VI
Assist. Schools Division Supt. EDNA P. ABUAN, PhD
DANTE J. MARCEL, PhD, CESO VI
Chief Educ. Supervisor, CLMD OCTAVIO V. CABASAG, PhD
Chief Education Supervisor, CID RODRIGO V. PASCUA, EdD
Development Team
Writers : Richel A. Culam, Marcris T. Domingo,Brain Win L.Garcia,
Fay P. Managuelod,Cyril M. Pacunana, and Carolyn M. Ramones
Content Editors : Inocencio T. Balag,EPS Math, SDO Isabela
Cyril M. Pacunana, Claudine Sevilleja, Mary Mendoza
Focal Persons : Inocencio T. Balag, Division EPS- Mathematics, Isabela

Ma. Cristina Acosta, Division EPS-LR
Isagani R. Duruin, PhD., Regional EPS- Mathematics
Rizalino G. Caronan, Regional EPS- LRMDS
Printed by DepEd Regional Office No. 02

Regional Center, Carig Sur, Tuguegarao City
ii
TABLE OF CONTENTS
Competency Page No.
Define Accounting 1
The Learner Describe the Nature of Accounting 7
The Learner Narrate the History/Origin of Accounting 11
Define External Users and Gives Examples

Define Internal Users and Give Examples 16
Explain the Varied Accounting Concepts and Principles
Solve Exercises on Accounting Principles as Applied in Various Cases 23
The Learners shall be Able to Illustrate the Accounting Equation
Perform Operations Involving Simple Cases with the use of the
Accounting Equation 28
Discuss the 5 Major Accounts 35
Prepare A Chart of Account 42
Illustrate the Format of a General and Special Journals 51
Illustrate the Format of a General and Subsidiary Ledger 59
Analyze Common Business Transactions Using the Rules of Debit And Credit 66
Solve Simple Problems and Exercises in the Analysis of Business Transactions 74
Describes the Nature of Transactions in A Service Business 86
Record Transactions of Service Business in the General Journal 92
Posts Transactions in the Ledger 118
Prepares a Trial Balance 146
iii
FUNDAMENTALS OF ACCOUNTANCY,
BUSINESS AND MANAGEMENT 1
Name of Learner: ________________________________ Grade Level: _______________
Section: ________________________________________ Date: _____________________
LEARNING ACTIVITY SHEET
Definition of Accounting
Background Information for Learners:
Accounting is the process of IDENTIFYING, RECORDING AND COMMUNICATING

economic events of an organization to interested users. This involves selecting economic events
that are relevant to a particular business transaction. The economic events of an organization are
referred to transactions.
Learning Competency with code:
Define accounting. (ABM_FABM11-IIIa-1)
Activity I
Directions: Give five examples of economic events in a bakeshop business.

1.________________________________________________________________
2.________________________________________________________________
3.________________________________________________________________
4.________________________________________________________________
5.________________________________________________________________
Activity II
II. Multiple Choice: Choose the correct answer from the options given below. Circle the letter of
the best answer.
1. Which of the following is NOT a relevant economic event?

A. Elijah, a manager of Northwing Corporation, who sold an abandoned building of his
company.
B. A customer service customer representative attended to the concern of complaining client
C. Francis Company borrowed P5M from a bank due to a tight financial condition.
1
D. Angel Company gave its employees their salaries for the month of May
2. Which of the following statements describes the accounting process?

A. Recording economic events is an essential part of the accounting process.
B. It involves identifying relevant economic events.
C. The accounting process is not complete if the financial information is not communicated to
interested users.
D. All of the above
3. Which is the most important step in the accounting process?

A. Identification
B. Communication
C. Recording
D. All steps are equally important
4. Which of the following is not a step in the accounting process?

A. Identification
B. Recording
C. Communication
D. Verification
5. Rose, the chief accountant of Northwing Corporation, is preparing for a meeting with the top
management. This meeting is done monthly to evaluate the performance of the company. Which
step of the accounting process is most likely being done?
A. Recording
B. Communication
C. Identification
D. Classification
Activity III
Directions: Explain the three process of accounting using the three highlighted words in the
graphic:
IDENTIFICATION
2
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________
RECORDING
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
____________________________________________________________________
COMMUNICATING
3
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
___________________________________
Activity IV
Give two types of business from different industry (e.g. Shell, Puregold). In each business, give
four examples of economic events. Discuss why these economic events or transaction are
important.
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
___________________________________
Activity V
Directions: Answer what is being ask.
1. Do your parents ask how you spend your allowance?
___________________________________________________________________
2. When deciding between buying a soft drinks or fruit juices, what is the basis of your decision?
Do you consider the prices of these commodities before you decide?
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
_______________________
3. Do you consider walking from school rather than riding tricycle sometimes because you want
to save money?
___________________________________________________________________
4. Relate your answers above to accounting.
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
4
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
___________________________________
Guide Questions:
1. What are relevant economic events in an organization?
2. How do you identify relevant economic events in an organization?
3. After identifying the relevant economic events in an organization, how do accountants or
bookkeepers record the transactions?
Rubrics for Scoring
Points
10 There is a clear, well focused idea that stands out and supported by
detailed information
8 Main idea is clear but supporting information is general
6 Main idea is somewhat clear, but there is a need for more supporting
information
4 The main idea is not clear. There is a seemingly random collection of
information
Reflection:
Answer briefly.
1. What do you think you have learned from this activity?
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
_______________________
2. What did you like most about this activity and why?
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
_______________________
References
1. Fundamentals of Accountancy, Business, and Management by: Joselito Florendo
2. https://drive.google.com/file/d/0B869YF0KEHr7dW04Xzd3UWRNZW8/view
Answer Key:
Activity I
1. Sales of bakeshop products
2. Purchase of raw materials that will be used in baking (e.g. flour, eggs)
3. Salaries of baker
5
4. Business permits
5. Purchase of equipment for baking
Activity II
1. B
2. D
3. D
4. D
5. B
Activity IV-VI -- Answers may vary
6
Section: ________________________________________ Date: _____________________
Nature of Accounting

The five basic features of accounting are:
1. Accounting is a process.
2. Accounting is an art.
3. Accounting is an information system.
4. Accounting is a service activity.
5. Accounting is a means not an end.

The learner describes the nature of accounting. (ABM_FABM11-IIIa-2)
Procedure
Activity I
Directions: Identify which feature of accounting being described. Write the letter of the correct
answer before each number
A. Accounting is a process D. Accounting is an information system

B. Accounting is an art E. Accounting is a means not an end
C. Accounting is a service activity
_____1. Accounting provides assistance to decision makers by providing them financial reports
that will guide them in coming up with sound decisions.
_____2. A process that refers to the method of performing any specific job step by step according
to the objectives or targets.
_____3. It is behavioural knowledge involving a certain creativity and skill that help us attain some
specific objectives.
_____4. It is recognized and characterized as a storehouse of information.
_____5. It is a tool to achieve a specific objective.
7
Activity II
Directions: Give one specific example of each feature of accounting that is applied in daily
operations of business. Write your answer on the space provided.
1. Accounting is a process.
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
_______________________
2. Accounting is an art.
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
_______________________
3. Accounting is an information system.
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
_______________________
4. Accounting is a service activity.
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
_______________________
5. Accounting is a means not an end.
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
__________________________________
___________________________________________________________________
Activity III
Direction: Describe the images in relation to nature of accounting. Write your brief description in
the box provided
8
Guide Questions:
1. What is the nature of accounting?
2. Why is it important to understand the feature of accounting?
3. How do you differentiate the features of accounting?
9
Rubrics for Scoring
Points
10 There is one clear, well-focused idea that stands out and supported by
information
information
Reflection:
Write your brief description of your experiences by answering the following questions.
1. How do you find the activity?
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________
2. What was the most challenging or least interesting about the activity?
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
____________
Reference for learners:
Fundamentals of Accountancy, Business & Management by Joselito G. Florendo,

https://drive.google.com/file/d/0B869YF0KEHr7dW04Xzd3UWRNZW8/view
Answer Key:
Activity I
1. C
2. A
3. B
4. D
5. E
Activity II
1. Collection, recording, classification, summarization, finalization, and reporting of financial
data.
2. Record transactions according to standards and professional ethics.
3. Income statement, Balance Sheet, expense account of the business
4. Providing financial reports to the owners, and other stakeholders
5. Objective of the company. (expansion, profit, stability)
Activity III- Answers may vary
10
Section: ________________________________________ Date: _____________________
History of Accounting
Accounting is as old as the civilization itself. It has evolved in response to various social and
economic needs of men. Accounting started as a simple recording of repetitive exchanges. The
history of accounting is often seen as indistinguishable from the history of finance and business.
The learner narrates the history/origin of accounting (ABM_FABM11-IIIa-4)
Procedures:
Activity I
I. Multiple Choice: Choose the correct answer from the options given below. Encircle the letter of
the best answer.
1. Who is considered the father of accounting?
a. Queen Victoria
b. Luca Pacioli
c. Augustus
d. Suetonius
2. Which order of events portray the history of accounting?

a. Early development in Mesopotamia-Development in Roman Empire →Dissemination
of double-entry bookkeeping in the fourteenth century Italy → Signing of charter by
Queen Victoria-Formation of Accounting Standard such PAS and PFRS.
b. Development of Roman Empire → Early Development in Mesopotamia-Dissemination
of double-entry bookkeeping in the fourteenth century Italy-Signing of Charter by
Queen Victoria → Formation of accounting standards such as PAS and PFRS
c. Early development in Mesopotamia-Development in Roman Empire → Dissemination
of double-entry bookkeeping in the fourteenth century Italy → Signing of charter by
Queen Victoria
11
d. Early development in Mesopotamia → Development in Roman Empire-Signing of
Charter by Queen Victoria → Dissemination of double-entry bookkeeping in the
fourteenth century Italy → Formation of accounting standards such as PAS and PFRS.
3. The accounting history covers long period. Which of the following statements regarding
the history of accounting is NOT correct?
a. PAS and PFRS are the standards followed by the accountants in performing their
profession in the present day.
b. It is believed that accounting was being used as early as the days of the ancient
Mesopotamia.
c. During the fourteenth century Italy, the use of single-entry bookkeeping became
widespread due to the work of Luca Paciolli.
d. The modern profession of chartered accountants originated from Scotland.
4. The double entry system was laid by_______________?

a. Emperor Augustus
b. Luca Pacioli
c. Queen Victoria
d. None of the above’
5. The dissemination of double entry was introduced in______________.

a. The reign of Emperor Augustus
b. Cradle civilization
c. Fourteenth Century Italy
d. Nineteenth Century
Activity II:
Directions: Read the events (evolution of accounting) below. They are out of order. Write the
number into sequence into the blank space to place the events in order.
_____French revolution-The thorough study of accounting and development of accounting

theory began during this period. Social upheavals affecting government, finances, laws, customs
and business had greatly influenced the development of accounting.
____ The Cradle of Civilization-Around 3600 B.C., record-keeping was already common from
Mesopotamia, China and India to Central and South America. The oldest evidence of this practice
was the “clay tablet” of Mesopotamia which dealt with commercial transactions at the time such
as listing of accounts receivable and accounts payable.
_____ 14th Century-Double-Entry Bookkeeping The most important event in accounting

history is generally considered to be the dissemination of double entry bookkeeping by Luca
Pacioli (‘The Father of Accounting’) in 14th century Italy. Pacioli was much revered in his day,
and was a friend and contemporary of Leonardo da Vinci. The Italians of the 14th to 16th centuries
are widely acknowledged as the fathers of modern accounting and were the first to commonly use
Arabic numerals, rather than Roman, for tracking business accounts. Luca Pacioli wrote Summa
12
de Arithmetica, the first book published that contained a detailed chapter on double-entry
bookkeeping.
_____ The Industrial Revolution (1760-1830) Mass production and the great importance of fixed
assets were given attention during this period.
_____ The Development of Modern Accounting Standards and Commerce- The accounting
profession in the 20th century developed around state requirements for financial statement audits.
Beyond the industry's self-regulation, the government also sets accounting standards, through laws
and agencies such as the Securities and Exchange Commission (SEC). As economies worldwide
continued to globalize, accounting regulatory bodies required accounting practitioners to observe
International Accounting Standards. This is to assure transparency and reliability, and to obtain
greater confidence on accounting information used by global investors.
_____ 19th Century – The Beginnings of Modern Accounting in Europe and America. The
modern, formal accounting profession emerged in Scotland in 1854 when Queen Victoria granted
a Royal Charter to the Institute of Accountants in Glasgow, creating the profession of the Chartered
Accountant (CA). In the late 1800s, chartered accountants from Scotland and Britain came to the
U.S. to audit British investments. Some of these accountants stayed in the U.S., setting up
accounting practices and becoming the origins of several U.S. accounting firms. The first national
U.S. accounting society was set up in 1887. The American Association of Public Accountants was
the forerunner to the current American Institute of Certified Public Accountants (AICPA)
Activity III:
Directions: Identify which era in the history of accounting being illustrated. Write the letter of
the correct answer before each number.
A. The Cradle Civilization D. The Industrial Revolution
B. 14th Century E. 19th Century
C. French Revolution F. 20th Century
_____1. Mass production and the great importance of fixed assets were given attention during this
period.
_____2. The thorough study of accounting and development of accounting theory began during
this period. Social upheavals affecting government, finances, laws, customs and business had
greatly influenced the development of accounting.
_____3. Record-keeping was already common from Mesopotamia, China and India to Central and
South America. The oldest evidence of this practice was the “clay tablet” of Mesopotamia which
dealt with commercial transactions at the time such as listing of accounts receivable and accounts
payable.
_____4. The most important event in accounting history is generally considered to be the
dissemination of double entry bookkeeping by Luca Pacioli (‘The Father of Accounting’)
13
_____5. In this period rapid changes in accounting practice and reports were made. Accounting
standards to be observed by accounting professionals were promulgated. Notable practices such
as mergers, acquisitions and growth of multinational corporations were developed.
_____6. The modern, formal accounting profession emerged in Scotland in 1854 when Queen
Victoria granted a Royal Charter to the Institute of Accountants in Glasgow, creating the
profession of the Chartered Accountant (CA).
____7. The accounting profession developed around state requirements for financial statement
audits. Beyond the industry's self-regulation, the government also sets accounting standards,
through laws and agencies such as the Securities and Exchange Commission (SEC). As economies
worldwide continued to globalize, accounting regulatory bodies required accounting practitioners
to observe International Accounting Standards.
____8. Double entry in bookkeeping was developed.
____9. Tablet is used as receipt.
___10. It is this era that the accountant is called the eye and the ear of the king.
Activity IV
Give at least three examples of how earlier periods made use of the accounting process.
1. ______________________________________________________________
2. ______________________________________________________________
3. ______________________________________________________________
Activity V
Direction: Answer what is being ask.
Why do historians, consider the dissemination of the double-entry bookkeeping of Luca Pacioli in
the fourteenth century the most important event in the accounting history?
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
_
Guide Questions:
1. How did the accounting develop?
2. What was the most important event in the accounting history?
3. What are the events in the past that lead to the development of accounting?
Rubrics for Scoring

Points
10 There is a clear, well focused idea that stands out and supported by
information
14
information
Reflection: What was the most challenging or least interesting about this activity?
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
____________

Answer Key:
Activity I
1. b
2. a
3. c
4. b
5. c
Activity II
1. The Cradle of Civilization
2. 14th Century-Double Entry Bookkeeping
3. French Revolution (1700)
4. The Industrial Revolution
5. 19th Century- The Beginnings of Modern Accounting in Europe and America
6. The Development of Modern Accounting Standards and Commerce.
Activity III
1. D
2. C
3. A
4. B
5. E
6. E
7. F
8. B
9. A
10. A
Activity IV
1. Clay
2. Tablet
3. Daybook/Memos
4. Stewardship
Activity V- Answers may vary
15
Section: ________________________________________ Date: _____________________

External and Internal Users of Financial Information
Accounting is called the language of business communicates accounting information to

help many types of users. The user’s need for financial information depend upon the type of
decisions to be made.
Financial reports supply the information to the internal and external users in order for
them to make decisions connected to the business.

At the end of the activity the students should be able to:
1. Define external users and gives examples (ABM_FABM11-IIIa-7)
2. Define internal users and give examples (ABM_FABM11-IIIa-8)
Procedure:
Activity I
Directions: Classify each of the following as either external user (E), or internal user (I).
__________1. Creditor
__________2.Employees
__________3. Academe
__________4.Government
__________5.Stockholder
__________6.Customer/Client
__________7.Potential Investor
__________8. Management
__________9.General Public
__________10.Owners
16
Activity II
Directions: Choose the correct answer from the options given below. Circle the letter of the best
answer.
1. Which of the following is NOT considered internal user of accounting information?
a. Owners of the business
b. Suppliers
c. Senior partners of audit firm
d. Field workers
2. Raymond is a professor in accountancy in the BS Accountancy program of the University

of Sto. Tomas. He is also a stockholder of Northwing Co. In the point of view of
Northwing Co., Raymond is an
a. Internal User
b. External user
c. a & b
d. none of the above
3. Which of the following is NOT considered an external user of the accounting

information?
a. BIR
b. Customers
c. Production supervisor
d. A student of accountancy
4. The government is also an interested outside party that analyzes a company’s financial
statements. Which of the following is NOT performed by the government?
a. The government encourages or prohibits certain business activities depending on their
effect on the economy.
b. The government examines financial statements to help companies in formulate
business decisions
c. The government assesses the taxes payable by companies through the analysis of
financial statements.
d. The government is a regulatory body that oversees all business.
5. Management consists of the following

a. Top management, supervisors, field workers, board of directors
b. Board of directors, supervisors, top management, laborers
c. Top management, board of directors, middle managers, supervisors
d. Owners, top management, middle managers, supervisors, laborers
6. The group of users of accounting information invested resources to the company with the
hope of earning acceptable returns.
a. Government
b. Potential investors
c. Creditors
d. Owners or Stockholders
17
7. Which of the following does NOT fall under the category of customer?
a. Francis, a loyal gamer in Angel Computer shop.
b. Jeff, a client of Optical Shop
c. Jose, a regular purchase of soft drink in Lyn’s Sari-Sari Store.
d. Juan, an individual collecting monthly payment from Jaja Co.
8. Which of the following information in a company’s financial statements concerns

creditors?
a. Amount of profit
b. Borrowings of a company
c. Assets of a company
d. All of the above
9. In what aspect do creditors and potential investors differ?

a. Creditors are wary of the riskiness of a company
b. Creditors are exposed to more risk than investors
c. Wealthy individuals can only invest not lend to a company.
d. Creditors receive fived amount of fee in their loans to the business.
10. Why do costumers look at the companies’ financial statements?

a. To help members of academe to gather data for educational purpose
b. To decide whether or not they will lend resources to the company.
c. To see if it will be beneficial to build a long-term relationship with the company
d. To estimate potential returns if he or she plans to transact with company
Activity III
Directions: Search up, down, forward, backward, and on diagonal to find the hidden words. Find
the following words:
• Government
• Management
• Employees
• Costumers
• Banks
• Money
• Creditors
• Stockholders
18
WORD SEARCH
S J Q L M O V L T E T T
Y R U A R P A P U G N E
C R E C B C G J B E E M
M U J D A B F P M P M P
X F S D L G Y E J R N L
L W E T F O G L J M R O
N M I P O A H P E S E Y
E Q E M N M Y K U S V E
E A W A T J E E C U O E
Y R M N R K Y R N O G S
S R E N W O Z B S O T J
C R E D I T O R S D M S
Activity IV
Directions: Supply the missing information.
Types of User Definition Example of Users Benefits from

Accounting
Information
Customers Main source of 1. Whether or not to
income of businesses build relationships
with businesses
Creditors Provides additional Banks, lending 2.
funds when the initial institution,
investment of the government
owners is exhausted
3. An external user BIR Oversees business,
whose primary role is Check the accuracy
DOLE
to regulate, analyze of financial
financial statements DTI statements
to determine of taxes
payable
19
Management Employees that make Board of Directors, 4.
decisions for the top management,
company middle-level
manager, supervisors
Owners Existing investor of 5. Mainly concerned
the company; with returns earned
concerned mostly
with profits of the
company
Employees Persons in the Laborers, Field 6.
company aside from workers, non-
managers and owners managerial
or stockholders employees
Activity V: Arrange & Identify
Directions: Arrange the jumbled words of the different users of financial information in the box,
after which identify each arranged word whether it is internal (I) or external users of financial
information. Write your answer on the space provided.
1.NTEMRNEVGO 4.SUCMOTRES 7.KSNAB
2.RECSRTOID 5. AGENAMEMTN 8.MEEDCAA
3.LOPEMEEY 6.WORSEN 9.SRSDHOLAKCOT
10.RSIEPPLUS
1.___________________________________
2.___________________________________
3.__________________________________
4.__________________________________
5.__________________________________
6.__________________________________
7.__________________________________
8.__________________________________
9.__________________________________
10._________________________________
20
Activity V:
Directions: Answer what is being ask. Write your answer on the space provided.
1. Name the two broad categories of users of financial information and give three examples
each.
________________________________________________________________________
________________________________________________________________________
__________________________________________
2. What kind of information do users need that can be answered by financial statements?
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
______________________
Guide Questions:
1. Who are the external users?
2. Who are the internal users?
3. What are the benefits do external and internal users get from the financial information?
Rubrics for Scoring

Points
10 There is a clear, well focused idea that stands out and supported by detailed
information
6 Main idea is somewhat clear. But there is a need for more supporting
information
information
Reflection:
Write your brief description of your experiences by answering the following questions.
1. How do you find the activity?
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________
________________________________________________________________________
________________________________________________________________________
__________________________________________
2. What did you like most about the activity, and why?
________________________________________________________________________
________________________________________________________________________
21
________________________________________________________________________
________________________________
3. What was the most challenging about the activity?
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________
Reference for learners:

Answer Key:
Activity I
1. E 6.E
2. I 7.E
3. E 8.I
4. E 9.E
5. I 10.I
Activity II
1. b 6.d
2. a 7.d
3. c 8.d
4. b 9.a
5. c 10.c
Activity IV
1. Patrons, clients, people acquiring goods or services for a fee
2. Determining the credit worthiness of an organization
3. Government
4. Uses financial information in making decisions
5. Laborers, field workers, non-managerial employees
6. Mainly concerns with their investment and to make decisions.
Activity V
1. Government/E 6. Owners/I
2. Creditors/E 7. Bank/E
3. Employee/I 8. Academe/E
4. Customers/E 9. Stockholders
5. Management/I 10. Suppliers/E
22
BUSINESS, AND MANAGEMENT 1
Section: ________________________________________ Date: _____________________

The Accounting Concepts and Principles
23
Background Information or Learners
It seems that you already understood our previous topic. I am glad that you were able to
accomplish all the activities in the previous lesson. Can you still differentiate the internal and
external users of accounting? I’m sure you can. And I think we are now ready to proceed to the
next topic.
In this topic, please be reminded of the principles of accounting as written below before you
answer the following activities.
• Business Entity Principle- a business enterprise is separate and distinct from its owner or
investor.
• Going Concern Principle- business is expected to continue indefinitely.
• Time Period Principle- financial statements are to be divided into specific time intervals.
• Monetary Unit Principle- amounts are stated into a single monetary unit.
• Objectivity Principle- financial statements must be presented with supporting evidence.
• Cost Principle- accounts should be recorded initially at cost.
• Accrual Accounting Principle- revenue should be recognized when earned regardless of
collection and expenses should be recognized when incurred regardless of payment. On the
other hand, the cash basis principle in which revenue is recorded when collected and
expenses should be recorded when paid. Cash basis is not the generally accepted principle
today.
• Matching Principle- cost should be matched with the revenue generated.
• Disclosure Principle- all relevant and material information should be reported.
• Conservatism Principle- also known as prudence. In case of doubt, assets and income
should not be overstated while liabilities and expenses should not be understated.
• Materiality Principle- in case of assets that are immaterial to make a difference in the
financial statements, the company should instead record it as an expense.
So, good luck and enjoy answering the activities!
LEARNING COMPETENCY
Explain the varied accounting concepts and principles (ABM_FABM11-IIIb-c-15), solve

exercises on accounting principles as applied in various cases (ABM_FABM11-IIIb-c-16)
Activity 1: Spot the Difference
The New Munoz Bakeshop

Jeniffer Garcia opened her new bakeshop named The New Munoz Bakeshop. She opened
a bank account for her business amounting to P600,000. Her business earned P50,000 but she had
doubts with the recorded expense of P60,000. The list of expenses is as follows:
24
Rent Expense 10,000
Salary Expense 20,000
Utilities Expense (at Home) 15,000
Utilities Expense (at the Store) 10,000
Insurance Expense 5,000
Withdrawals 10,000
TOTAL 60,000
Guide Question:
In the situation stated above, what do you think should NOT be included as EXPENSES? Write
INCLUDED or NOT INCLUDED on the space provided then explain your answers.
1. Rent Expense: __________________________________________

2. Salary Expense: __________________________________________
3. Utilities Expense (at Home): _____________________________________
4. Utilities Expense (at the Store): ____________________________________
5. Insurance Expense: _________________________________________
6. Withdrawals: __________________________________________
The above activity is an application of the Business Entry Principle which is one of the principles
of accounting.
Activity 2: Matching
In this activity, you are going to match the following Accounting Principles with their definitions:
write the letter of your answers on the space before each item.
a. Accrual Accounting Principle f. Matching Principle

b. Conservatism Principle g. Materiality Principle
c. Cost Principle h. Monetary Unit Principle
d. Disclosure Principle i. Objectivity Principle
e. Going Concern Principle j. Time Period Principle
_____1. All relevant information should be included in the financial reports.

_____2. In case of doubt, assets and income should not be overstated.
_____3. Assume that the company will continue indefinitely.
_____4. All transactions should be supported by unbiased evidence.
_____5. Expenses should be recorded in the period when the revenue is generated.
_____6. Minimal costs incurred should be recorded as an expense.
_____7. A Philippine company should report financial statements in pesos.
_____8. A barber who performs services for a client should record revenue.
_____9. Statement of Financial Position should be recorded as of December 31, 2019.
____10. A company that purchases furniture should record it as its acquisition price.
Are you sure to your answers? You may double check your answers for your assurance.
25
Activity 3: Principle Word Hunt
At this point of our activity, all you have to do is to find the significant terminologies that we have
discussed through word hunt. Good luck and enjoy learning!
PROCEDURE
1. Find 10 significant words that was mentioned in the background information.

2. Locate them by running in three possible directions: horizontally (up-down), vertically
(left-right), and diagonal. Some words are in inverted form.
3. Use any color to locate the words.
A S G A R D L O R D Y L O F S
C E D L A O M I Y A T O P U T
C L I U T Y B O H U I N E N U
R E S C L A Y L N L V E R N N
U N C A N C E R C E I S I E S
A A L R P U H U H G T T O L R
L D O D R R O O O E C A D I N
E Y S U I U O T O N E N R S R
P R U L N X C E X D J K K Y E
I R R O C O S T T U B U I N C
C O E P I E S T V I O S P O N
D T E E P M O B I L E N D U O
E H L I L S M A T C H I N G C
H E R O E U D O R A C L A U D
B U B U S I N E S S T U O L E
C H A N G E E L L I T E S E D
Closure
In case where application of one accounting concept or principle leads to a conflict with
another accounting concept or principle, accountants must consider what is best for the
users of the financial information. An example of such a case would be the trade off
between relevance and reliability. Information is more relevant if it is disclosed timely.
However, it may take more time to gather reliable information. Whether reliability of
information may be compromised to ensure relevance of information is a matter of
judgment that ought to be considered in the interest of the users of the financial information.
References for Learners
26
Fundamentals of Accountancy, Business and Management 1, P.B. Liquanan, E. B. Ogena,
M.A.C. Montealegre, R.V. Diaz, M.C.R.B. Bautista, B.F. Nebres, C.C. Oracion, G. Price,
S. Bevins
https://www.accountingcoach.com/accounting-principles/explanation
https://accounting-simplified.com/financial-accounting/accounting-concepts-and-
principles/
Answer Key
ACTIVITY 1. SPOT THE DIFFERENCE

1. Rent Expense: it should be included since the rent is for the business.
2. Salary Expense: it should be included since it is related to the operation of the business.
3. Utilities Expense (at home): should NOT be included; it is a personal expense
4. Utilities Expense (at the store): should be included; it is an expense of the business.
5. Insurance Expense: should be included since insurance is for the business.
6. Withdrawals: should NOT be included since the withdrawals is for personal use.
ACTIVITY 2. MATCHING
1. G 4. B 6. D 9. E
2. J 5. C 7. H 10. F
3. A 6. D 8. I
ACTIVITY 3. PRINCIPLE WORD HUNT

(The answers are in any order)
A S G A R D L O R D Y L O F S
C E D L A O M I Y A T O P U T
C L I U T Y B O H U I N E N U
R E S C L A Y L N L V E R N N
U N C A N C E R C E I S I E S
A A L R P U H U H G T T O L R
L D O D R R O O O E C A D I N
E Y S U I U O T O N E N R S R
P R U L N X C E X D J K K Y E
I R R O C O S T T U B U I N C
C O E P I E S T V I O S P O N
D T E E P M O B I L E N D U O
E H L I L S M A T C H I N G C
H E R O E U D O R A C L A U D
B U B U S I N E S S T U O L E
C H A N G E E L L I T E S E D
27
Section: ________________________________________ Date: _____________________

The Accounting Equation
28
Background Information for Learners
I am glad that you were able to accomplish all the activities in the previous lesson. Can you
still identify the principles of accounting? I’m sure you can. And I think we are now ready to
proceed to the next topic.
In this lesson, let us consider the accounting equation which is written as:
ASSETS = LIABILITIES + EQUITY

TAKE NOTE:
• That for every transaction, the accounting equation should always be balanced.
• That Assets are resources owned by the business.
Example: Cash
• That Liabilities are obligations by the business.
Example: Loans
• That Equity is the residual interest of the owner of the business. Meaning, any assets
left after paying liabilities is the right of the owner of the business.
Example: Capital
4 Elements That Affect Equity
1. Investment
2. Withdrawals
3. Revenue
4. Expenses
For further explanation of this topic, let us consider the following example.
DATE TRANSACTION
Paolo Reyes started a delivery service on July 1, 2019. The following
JULY transactions occurred during the month of July.
1 He invested PHP800,000 cash and Cars amounting to PHP200,000
Reyes borrowed PHP100,000 cash from PNB for use in his business.
2
Bought tables and chairs from Orocan and paid PHP45,000 cash
7 Various equipment were purchased on account from Fortune for

PHP55,000
15
Reyes made a cash withdrawal of PHP5,000 for personal use
18 The account due to Fortune was paid in cash
20
29
DATE ASSETS LIABILITIES OWNER’S EQUITY
Loans Accounts Reyes, Reyes,
July Cash Cars Furniture Equipment
Payable Payable Withdrawals Capital
1 800,000 200,000
100,000 1,000,000
2 100,000
Balances 900,000 200,000
100,000 1,000,000
7 (45,000) 45,000
Balances 855,000 200,000 45,000
100,000 1,000,000
15 55,000
Balances 855,000 200,000 45,000 55,000 55,000
100,000 (5,000) 1,000,000
18 (5,000)
Balances 850,000 200,000 45,000 55,000 55,000
100,000 (5,000) 1,000,000
20 (55,000) (55,000)
Balances 795,000 200,000 45,000 55,000 100,000 0 (5,000) 1,000,000
1,095,000 1,095,000
From the table above, we can notice that the amount of Assets is equal to the sum of
Liabilities and Owner’s Equity. It means that the equation is balanced. The table is used to classify
the status of the transactions. As you can see, it is organized according to the order of dates. Cash,
cars, furniture, and equipment are the identified elements under Assets. Loans payable and
accounts payable are obviously under Liabilities, while Reyes, withdrawals and Reyes, capital are
under Owner’s Equity.
TAKE NOTE:
If the transaction pertains to CASH-OUT, it is written with open and close parenthesis.
Example: (45,000)
Learning Competency
The learners shall be able to illustrate the accounting equation (ABM_FABM11-IIIb-c-

8); perform operations involving simple cases with the use of the accounting equation
(ABM_FABM11-IIIb-c-9)
Activity 1: Increase/ Decrease
For each transaction, tell whether the Assets (A), Liabilities (L) and Equity (E) will increase (I),
decrease (D) or is not affected (NE).
A L E
1. The owner invests personal cash in the business. ___ ___ ___
2. The owner withdraws business assets for personal use. ___ ___ ___
3. The company receives cash from a bank loan. ___ ___ ___
4. The company repays the bank that had lent money. ___ ___ ___
5. The company purchases equipment with its cash. ___ ___ ___
30
6. The owner contributes her personal truck to the business. ___ ___ ___
7. The company purchases supply on credit. ___ ___ ___
8. The company purchases land by paying half in cash and
signing a note. ___ ___ ___
9. The owner withdraws cash for personal use. ___ ___ ___
10. The company repays the suppliers. ___ ___ ___
Activity 2: Describe the Table
In this activity, instead of giving the transaction, the activity below is in reverse. You are
going to describe the given transaction. The table is given, study the elements and write down the
transaction of the given table.
OWNER’S
DATE ASSETS LIABILITIES
EQUITY
April Cash Supplies Equipment
Balance 60,000 7,500 300,000 75,000 292,500
1 150,000 150,000
2 (20,000) 20,000
3 (112,500) (112,500)
4 5,000 5,000
5 (15,000) (15,000)
6 (53,000) (53,000)
7 (8,000) (8,000)
Are you ready to write down the transactions? I will do the first and last statement for your basis.
1. The owner invested cash of PHP150,000 or the business earned PHP150,000 cash from
providing services.
2. ______________________________________________________________
3. ______________________________________________________________
4. ______________________________________________________________
5. ______________________________________________________________
6. ______________________________________________________________
7. The owner withdrew supplies worth P8,000 or the business used supplies worth P8,000.
Activity 3. Table Completion
Since you are already done answering the previous activities, I think you are now ready to
make your own table using accounting formula. In this activity, you will write the correct entry for
each transaction.
Aug. 1 Garcia invested P48,000 cash in the business.

1 Rented office space and paid P800 cash for the August rent.
31
3 Purchased exploration equipment for P22,000 by paying P12,000
cash and agreeing to pay the balance in 3 months.
5 Purchased office supplies by paying P1,500 cash.
6 Completed exploration work and immediately collected P420 cash for the
work.
8 Purchased P1,350 of office equipment on credit.
15 Completed exploration work on credit in the amount of P8,000.
18 Purchased P700 of office supplies on credit.
20 Paid cash for the office equipment purchased on August 8.
24 Billed a client P2,400 for work completed; the balance is due in 30 days.
28 Received P5,000 cash for the work completed on August 15.
30 Paid the assistant’s salary of P1,100 cash for this month.
30 Paid P340 cash for this month’s utility bill.
30 Garcia withdrew P1,050 cash from the business for personal use.
LIABILITI
DATE ASSETS EQUITY
ES
AUG 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
1 48,000 48,000
1 (800) 800
3 (12,000) 22,000 10,000
5 (1,500) 1,500
6 420 420
8 1,350 1,350
15 8,000 8000
18 700 700
20 (1,350) (1,350)
24 2,400 2,400
28 5,000 (5,000)
30 (1,100) (1,100)
30 (340) (340)
30 (1,050) (1,050)
Balance 67,030 67,030
1. _______________ 6. _______________
2. _______________ 7. _______________
3. _______________ 8. _______________
4. _______________ 9. _______________
5. _______________ 10. ______________
Rubric for Scoring
ACTIVITY 1. INCREASE/ DECREASE (3 Points/ Item; 30 Total Points*)
3 2 1 0
If all columns of the If only 2 columns are If only 1 column is If nothing is
item are correct correct correct correct
32
ACTIVITY 2 . DESCRIBE THE TABLE (3 Points/ Item; 15 Total Points*)
3 2 1 0
Well explained the Almost explained the Slightly explained Did not even give
transaction. transaction. the transaction. any explanation of
the transaction.
Closure
The fundamental accounting equation, also called the balance sheet equation, represents
the relationship between the assets, liabilities, and owner’s equity of a person or business.
References For Learners
Fundamentals of Accountancy, Business and Management 1, P.B. Liquanan, E. B. Ogena,

M.A.C. Montealegre, R.V. Diaz, M.C.R.B. Bautista, B.F. Nebres, C.C. Oracion, G. Price,
S. Bevins
https://www.investopedia.com/terms/a/accounting-equation.asp#:~:text=The%20
accounting%20equation%20whereby%20assets,total%20assets%20for%20the
%20period)
Answer Key
ACTIVITY 1. INCREASE/ DECREASE

A L E
1. The owner invests personal cash in the business. I NE I
2. The owner withdraws business assets for personal use. D NE D
3. The company receives cash from a bank loan. I I NE
4. The company repays the bank that had lent money. D D NE
5. The company purchases equipment with its cash. NE NE NE
6. The owner contributes her personal truck to the business. I NE I
7. The company purchases supplies on credit. I I NE
8. The company purchases land by paying half in cash and
signing a note. I I NE
9. The owner withdraws cash for personal use. D NE D
10. The company repays the suppliers. D D NE
ACTIVITY 2. DESCRIBE THE TABLE
33
2. Purchased equipment at P20,000 for cash.
3. The owner withdrew cash of P112,500 or the business incurred P112,500 expenses and paid
in cash.
4. The company purchased supplies on account.
5. The owner withdrew cash of P15,000 or the business incurred P15,000 expenses and paid
in cash.
6. Paid liabilities worth P53,000.
ACTIVITY 3. TABLE COMPLETION
LIABILITI
DATE ASSETS EQUITY
ES
Renta Accounts Accounts
AUG Cash Equipment Supplies Capital Revenue Withdrawal
l Receivable Payable Expense
1 48,000 48,000
1 (800) 800
3 (12,000) 22,000 10,000
5 (1,500) 1,500
6 420 420
8 1,350 1,350
15 8,000 8000
18 700 700
20 (1,350) (1,350)
24 2,400 2,400
28 5,000 (5,000)
30 (1,100) (1,100)
30 (340) (340)
30 (1,050) (1,050)
Balance 67,030 67,030
34
Section: ________________________________________ Date: _____________________

Five Major Accounts

The expanded accounting equation is composed of five elements. Every time a transaction
occurs, we analyze the transaction whether it has a financial effect in the elements of the
accounting equation. These elements that we are referring to under the expanded accounting
equation are the five major classification of accounts – assets, liabilities, owner’s equity, revenues
and expenses.
Learning Competency with Code:
Discuss the 5 major accounts. (ABM_FABM11-III-d-e-19)
ACTIVITY 1
Indicate the classification of the accounts listed below as an ASSET, LIABILITY,
EQUITY, INCOME, or EXPENSE account under Column A and as either a Statement of Financial
Position account or an Income Statement account under Column B.
Accounts Titles Column A Column B
1. Accounts Receivable
2. Building
3. Notes Payable
4. Rent Expense
5. Owner’s Equity
6. Prepaid Expense
7. Inventories
35
8. Interest Income
9. Cash
10. Computer Equipment
11. Utilities Payable
12. Rent Income
13. Unearned Income
14. Land
15. Sales
Procedures:
1. Identify each of the given account.
2. Classify each account as asset, liabilities, equity, income or expenses.
3. Write under Column A your classification of the given account.
4. After classifying, check whether such account is a Statement of Financial Position account or
income statement account. Write your answer under Column B.
Guide Questions:
1. What are the five major types of accounts?
2. Can you give examples of accounts in each of the five major accounts?
3. What type of account affects the Statement of Financial Position? What about the Income
Statement?
Rubric for Scoring:
1 point for every correct answer
0 point for incorrect answer
Activity 2
Given the following transactions of GD Law Services, determine what accounting element is
affected. Write your answer in a sheet of paper.
1. Gina Dy put up her law and notarial office. She invested P200,000.00 as initial investment.
2. She paid P12,000 for stall rent applicable for one year.
3. She purchased a computer equipment worth P30,000.
36
4. She purchased a laptop and a printer worth P40,000 and P10,000, respectively. She paid
P30,000, the balance to be paid after 60 days.
5. She purchased office supplies amounting to P3,000.
6. She received consultancy fee from various clients, P15,000.
7. She received professional fee amounting to P30,000.
8. She paid business taxes amounting to P4,650 during the month.
9. She paid P2,000 electricity expense during the month.
10. She paid P12,000 for the salary of her assistant.
Procedures:
1. Read each transaction carefully.

2. Analyze the transaction.
3. Determine what specific element of the expanded accounting equation is affected in each
transaction.
Guide Questions:
2. What are the different accounts under each type?
3. What is the journal entry in each transaction?
4. What are the affected accounts and where do they classify?
Rubric for Scoring:
1 point each for every correct answer
0 point for incorrect answer
Activity 3
Read carefully the following situations. Analyze what each problem is trying to signify. Select the
best answer from the given choices. Write the letter of your choice on your answer sheet.
1. You are a business owner. Your business needs additional capital so you borrowed from a bank.
You signed a promissory note to pay the loan after a year. Which of the following accounts is
increased by the transaction?
a. Accounts Payable c. Accounts Receivable
b. Notes Payable d. Notes receivable
2. If you are the bank who lent a money to a business owner, which of the following accounts do
you think is increased?
37
3. A customer bought goods from your business, on credit. The customer orally promised to pay
the goods next week. Which of the following accounts is increased by this transaction?
4. From the point of view of the customer who bought goods from your business in #3 above,
which of the following accounts is increased?
b. Notes Payable d. Notes Receivable
5. Collection from customers in item #3 will result in an increase to what account?
b. Cash d. Notes Receivable
6. From the point of view of the customer who paid you in #5 above, which of the following
accounts is decreased?
a. Inventory c. Accounts Receivable
b. Cash d. Notes Receivable
7. You purchased a computer for P100,000. Which of the following accounts is increased by this
transaction?
a. Cash c. Computer equipment
b. Owner’s capital d. Inventory
8. Necy, the owner of EN’s Advertising, paid rent in advance for three months. What account on
Necy’s books will be increased by this transaction?
a. Cash c. Prepaid Expenses
b. Accounts Receivable d. Unearned Income
9. If you are the owner of the building being rented by EN’s Advertising, which of the following
accounts will be increased?
b. Unearned Income d. both a&b
10. What account under EN’s Advertising will be decreased in transaction #8?
b. Accounts Receivable d. Unearned Income
38
Procedures:
1. Read each transaction carefully.
2. Analyze the transaction.
3. Determine the accounts affected in every given problem.
4. Compute for what is asked in the problem.
Guide Questions:
2. What are the different accounts under each type?
3. What is the effect of each problem in the major types of accounts?
Rubric for Scoring:

1 point for every correct answer
0 point for every incorrect answer
Closure:
In this activity, I learned that ________________________________________
___________________________________________________________________
___________________________________________________________________
References:
Financial Accounting and Reporting 2nd ed., 2019, Millan, Z., pp. 104-125
Basic Accounting 4th edition, E. Valencia & G. Roxas., 2014, pp.89-120
Financial Accounting and Reporting, 2nd edition, Z. Millan, 2019, pp.136-137
ANSWER KEY:
Activity 1
Accounts Titles Column A Column B
39
1. Accounts Receivable ASSET Statement of Financial Position
2. Building ASSET Statement of Financial Position
3. Notes Payable LIABILITY Statement of Financial Position
4. Rent Expense EXPENSE Income Statement
5. Owner’s Equity EQUITY Statement of Financial Position
6. Prepaid Expense ASSET Statement of Financial Position
7. Inventories ASSET Statement of Financial Position
8. Interest Income INCOME Income Statement
9. Cash ASSET Statement of Financial Position
10. Computer Equipment ASSET Statement of Financial Position
11. Utilities Payable LIABILITY Statement of Financial Position
12. Rent Income INCOME Income Statement
13. Unearned Income LIABILITY Statement of Financial Position
14. Land ASSET Statement of Financial Position
15. Sales INCOME Income Statement
ANSWER KEY:
Activity 2
JOURNAL ENTRY ACCOUNTS AFFECTED
Account Name DR CR DR CR
1 Cash P 200,000 P Asset
Gina, Capital 200,000 Equity
2 Prepaid Rent 12,000 Asset
Cash 12,000 Asset
3 Computer Equipment 30,000 Asset
Cash 30,000 Asset
40
4 Computer Equipment 50,000 Asset
Cash 30,000 Asset
Accounts Payable 20,000 Liability
5 Office Supplies 3,000 Asset
Cash 3,000 Asset
6 Service Income 15,000 Revenue
Cash 15,000 Asset
7 Service Income 30,000 Revenue
Cash 30,000 Asset
8 Taxes and Licenses 4,650 Expense
Cash 4,650 Asset
9 Electricity Expense 2,000 Expense
Cash 2,000 Asset
10 Salary Expense 12,000 Expense
Cash 12,000 Asset
ANSWER KEY:
Activity 3
1. b 6. b
2. d 7. c
3. c 8. c
4. a 9. d
5. b 10. A
41
Section: ________________________________________ Date: _____________________

Chart of Accounts
A chart of account is a listing of accounts used by a company in its operations. It is
classified according to the five major types of accounts in the following order: assets, liabilities,
equity, revenues, and expenses. Account numbers are assigned to each account to facilitate
recording, cross-referencing and retrieval of information. It helps us organize our accounts by type,
account number, thus helps us locate easily the transaction information.
There is no standard way of assigning account numbers. However, they must be assigned
in a manner that the accounts are categorized logically. The larger the company is, the more
accounts it use, thus, the more digits in the account numbers. Smaller companies may have fewer
accounts and fewer digits in their account numbers.

Prepare a chart of accounts (ABM_FABM11-IIId-e-21).
ACTIVITY 1
The following are the accounts in the ledger of A Enterprises:
Accounts Payable A, Capital
Petty Cash Fund Salaries Expense
Cash Accounts Receivable
Equipment Sales Income
Income Tax Payable Accumulated Dep’n.-Equipment
Supplies Withholding Tax Payable
Interest Expense Prepaid Rent
42
Required: Prepare a chart of accounts for A Enterprises. Using the given account codes, determine
the following:
1. Accounts under the asset accounts.
2. Accounts under the liability accounts.
3. Accounts under the equity accounts.
4. Accounts under the revenue accounts.
5. Accounts under the expense accounts.
Procedures:
1. Take a glance at the given accounts.
2. Evaluate which among them belong to the following accounts: assets, liabilities, equity,
revenue and expense.
3. Arrange each properly classified account. (After cash account, what comes next?)
A ENTERPRISES
CHART OF ACCOUNTS
ACCOUNT CODE ACCOUNT TITLE
Assets:
101
110
120
130
151
155
156
Liabilities:
201
240
250
43
Equity:
301
Income:
401
Expenses
501
530
Guide Questions:
1. How are accounts classified?
2. How is a chart of account arranged?
3. What are account numbers/codes for in the chart of accounts?
Rubric for scoring

2pts each - for properly classified and correctly arranged accounts
1pt each – for properly classified accounts, but incorrectly arranged accounts
0.5 pt each – for accounts not properly classified and arranged
ACTIVITY 2
Directions/Instructions:
Complete the password by filling in a word that fits each clue.
44
Across
1. New accounts maybe __________to the chart of accounts as needed.
3. Interest owed on Notes Payable will be recorded as a credit in _______________ payable.
7. A ___________ of accounts is a listing of the accounts.
8. Interest expense and interest revenue/income accounts are classified as “Non-__________
expenses.
10. Unearned revenues and customer deposits are considered as __________ accounts.
Down
6. Accumulated depreciation is an example of a ________-asset account.
9. Notes ___________ are obligations supported by written or formal promises to pay by the
debtor in the form of promissory notes.
2. The _________ in the account number usually corresponds to how big or small a business is.
4. Revenues earned from rendering of services.
5. Represents the cost incurred on official business trips of employees and those sent to seminars.
Procedures:
1. Read each statement carefully.
2. Determine what each statement refers to.
45
3. Fill each box with the letter of your answer.
Guide Questions:
1. What are the accounts under each of the five major accounts?
2. What do the digits in the account number signify?
Rubric for scoring

Correct answers will earn 1 point.
Incorrect answers will earn 0 point.
ACTIVITY 3
Read the following sentences carefully. Choose the best answer from the given choices. Write the
letter of your choice on the space provided before each item. (1pt each)
_____1. Goods that are held for sale by a business is called
a. Inventory c. Accounts Receivable
b. Supplies d. Accounts Payable
_____2. The unused portion of rent paid in advance is known as
a. Prepaid rent c. Rent expense
b. Unearned income d. Accrued expense
_____3. These are income collected in advance but not yet earned.
a. Unearned income c. Service income
b. Sales d. Gross income
_____4. The cost of supplies used in an accounting period is known as
a. Prepaid supplies c. Supplies expense
b. Supplies cost d. Inventories
_____5. A merchandising or manufacturing business uses this account to record revenues earned
from primary business activities.
a. Sales c. Gains
46
b. Services income d. Losses
_____6. The portion of the cost of building or equipment that has been charged as expense in the
current accounting period is called
a. Accumulated depreciation c. Depreciation expense
b. Accumulated deduction d. Deduction expense
_____7. This refers to the costs associated with the usage of electricity, water and communication
for a particular accounting period.
a. Salaries expense c. Telephone expense
b. Utilities expense d. Cost of sales
_____8. This represents the costs incurred to register the business, to acquire the right to operate
and to settle taxes.
a. Taxes and licenses c. Travelling expenses
b. Cost of sales d. Salaries expense
_____9. Entity A sells an asset that is not an inventory for P100. The carrying amount of the asset
is P180. The P80 difference represents a
a. gain c. revenue
b. loss d. interest income
_____10. You opened up a business. Your initial investment to the business will be recorded in
which of the following accounts?
a. Owner’s payable c. Notes Payable
b. Owner’s equity d. Accounts Payable
Guide Questions:
1. In the chart of accounts, what are the account titles used by the business?
2. When do we need to use those accounts in the chart of accounts?
Rubric for scoring

 1 point for correct answer
 0 point for incorrect answer
47
Closure
In this activity, I learned that ____________________________________________
___________________________________________________________________
___________________________________________________________________
References
Fundamentals of Accountancy, Business and Management 1, J.G.Florendo, 2016, p.156
Basic Accounting 4th ed., E.G. Valencia & G. F. Roxas, 2015, pp.136-137
Financial Accounting and Reporting 2nd ed., Z.B. Millan, 2019, pp.108-117
https://www.accountingcoach.com/chart-of-accounts/crossword-puzzles/1
Financial Accounting and Reporting 2nd ed., Z.B.Millan, 2019, pp.132-135
Fundamentals of Accountancy, Business and Management 1, F.C.Tugas, et al., 2016, pp.58-59
Answer Key
Activity 1
A ENTERPRISES
CHART OF ACCOUNTS
ACCOUNT CODE ACCOUNT TITLE
Assets:
101 Cash
110 Petty Cash Fund
120 Accounts Receivable
130 Supplies
151 Prepaid Rent
155 Equipment
156 Accumulated Depreciation – Equipment
Liabilities:
48
201 Accounts Payable
240 Income Tax Payable
250 Withholding Tax Payable
Equity:
301 A, Capital
Income:
401 Sales Income
Expenses
501 Salaries Expense
530 Interest Expense
Answer Key
Activity 2
49
Answer Key:
Activity 3
1. a 6. c
2. a 7. b
3. a 8. a
4. c 9. b
5. a 10. b
50
Section: ________________________________________ Date: _____________________

General and Special Journals

In a single day, a company engages in hundreds and thousands of business transactions.
Some of these include cash and credit sales, purchases of inventories, payment of expenses,
acquisition of equipment, and many more.
To keep track of its transactions more efficiently, companies keep and maintain a set of
books and/or records called books of accounts. Books of accounts serve as a company’s financial
memory and comprise of every single business transactions and financial information of a
company.
Books of accounts are of two types – journals and ledgers. A journal is a chronological
record of company’s transactions listed by date. Most businesses may adopt different kinds of
journals but all business organizations use the most basic type of journal which is the general
journal referred to as the book of original entry. Aside from the general journal, there are also
special journals that are used for voluminous similar transactions. We have four special journals
namely cash receipts journal, cash disbursement journal, purchases journal and sales journal.

Illustrate the format of a general and special journals (ABM_FABM11-IIIf-23).
ACTIVITY 1
Read carefully the given transactions. Record the appropriate transaction in the General
Journal using the correct format.
Below are the transactions of Juan Manuell Enterprises for the month of May 2018.
May 3 Mr. Manuell invested P500,000 cash.
51
May 5 Purchases from Big Dipper Merchants P50,000 merchandise. Terms: 3/10, n/20.
May 6 Sold merchandise to Gemini Enterprises, P32,000. Terms: 2/10, n/30.
May 9 Purchased office supplies from Galaxy Co. for cash, P3,000 through Check No.
0031.
May 11 Gemini Enterprises settled its account in full. Issued OR#10241
May 16 Purchased merchandise from Polaris Trading, P55,000. Terms: P25,000 down
payment, balance on account. Terms: 2/10, n/30. Check No. 0032.
May 25 Purchased merchandise from Aurora Borealis Systems, P201,600. Terms: 2/10,
n/30.
May 26 Sold to Virgo Enterprises P150,000 worth of merchandise. Terms: 2/10, n/30.
May 30 Purchases from Meteor Trading P80,000. Terms: 2/15, n/30.
Procedures:
1. Prepare a General Journal with the following format:
2. Read and analyze the transactions carefully.

3. Identify appropriate transaction/s that should be recorded in the general journal then fill out the
columns properly.
Guide Questions:
1. What important considerations should you have in preparing error-free general journal?
2. What are the significant elements of the general journal?
3. What are the transactions that are to be recorded in the general journal? When does the
transaction happened? What are the significant accounts that are affected in the transaction, and
by how much?
52
Rubric for scoring
Every column in the general journal that is correctly filled out (date, account title and
explanation, account codes, amounts in the debit and credit) shall earn 1 pt., while incorrectly filled
out columns shall earn no points.
Activity 2
Read carefully the given transactions. Determine which among the following transactions
are to be recorded to the Cash Receipts Journal and to the Cash Disbursements Journal.
May 5 Purchases from Big Dipper Merchants P50,000. Terms: 3/10, n/20.
0031.
n/30.
May 26 Sold to Virgo Enterprises P150,000 worth of merchandise . Terms: 2/10, n/30.
Procedures:
1. Prepare a Cash Receipt Journal and Cash Disbursements Journal using the formats below:
53
3. Select the transactions that needs to be recorded in the cash receipts journal and cash
disbursements journal correct.
4. Get the total of each special journal.
Guide Questions:
1. What are the things that you need to consider in preparing cash receipts journal and cash
disbursements journal?
2. Can you name some of the transactions that needs to be recorded in the cash receipts journal
and cash disbursements journal?
3. What do you think is the difference between the cash receipt journal and the cash
disbursement journal in terms of format?
Rubric for scoring

Every column in both journals that is correctly filled out shall earn 1 pt. Incorrectly filled
ACTIVITY 3
Read carefully the given transactions. Determine which among the following transactions
are to be recorded to the Sales Journal and to the Purchases Journal.
0031.
54
n/30.
Procedures:
1. Prepare a Sales Journal and Purchases Journal using the formats below:

3. Select the transactions that needs to be recorded in each of the special journal (sales journal and
purchases journal).
4. Get the total of each special journal.
Guide Questions:
1. What are the things that you need to consider in preparing sales journal and purchases journal?
2. Can you name some of the transactions that can be recorded in the sales journal and purchases
journal?
3. What are to be stored in each of the columns of the sales journal and purchases journal?
Rubric for scoring
Every column in both journals that is correctly filled out shall earn 1 pt., incorrectly filled
55
Closure
In this activity, I learned that ____________________________________________
______________________________________________________________________________
______________________________________________________________________________
_____________________________________________
References
Fundamentals of Accountancy, Business and Management 1, J.G.Florendo, 2016, pp.165-189
https://www.accountingformanagement.org/cash-disbursements-journal/
https://www.accountingformanagement.org/sales-journal/
https://www.accountingformanagement.org/purchases-journal/
Answer Key
Activity 1
JUAN MANUELL ENTERPRISES
GENERAL JOURNAL
For the Month of May, 2018
Answer Key
Activity 2
56
57
Answer Key
Activity 3
58
Section: ________________________________________ Date: _____________________

General and Subsidiary Ledger

The general ledger (commonly referred by accounting professionals as GL) is a grouping
of all accounts that are used to sort and store information necessary in the preparation of financial
statements. It contains all the accounts of the company. Unlike journals that are arranged
chronologically (regardless of the accounts), the ledgers are usually grouped according to their
chart of accounts and arranged according to the order on how they appear on the financial
statements. A subsidiary ledger, on the other hand, is a group of like accounts that contains the
independent data of a specific general ledger. It is created or maintained if individualized data is
needed for a specific general ledger account. An example of a subsidiary ledger is the individual
record of various payables to suppliers. Other general ledger accounts that may become control
accounts include Inventory, Equipment, and Accounts Receivable.

Illustrate the format of a general and subsidiary ledger (ABM_FABM11-IIIf-24).
Activity 1:
Journalize the following transactions and then post them to the General Ledger.
59
0031.
n/30.
Procedures:
1. Analyze the given transactions.
2. Journalize each transaction in each specific special journal.
3. Post the transactions in the General Ledger.
Guide Questions:
1. What is a General Ledger?
2. What is the format of the General Ledger?
3. How are the accounts in the general ledger arranged?
Rubric for scoring

Each correctly filled out column of the general ledger shall earn 1 point (for each column entry).
Incorrectly filled out columns shall earn no point.
Activity 2
Utilizing the given problem from the previous activity, prepare a subsidiary ledger for the
Accounts Receivable account.
Procedures:
1. Identify which from the given transactions affects the accounts receivable account.
2. Prepare a subsidiary ledger for accounts receivable using the following format.
60
3. Reconcile the balance of the account with the balance that appear in the General Ledger.
Guide Questions:
1. What is accounts receivable subsidiary ledger?
2. Can you illustrate the format of a subsidiary ledger for accounts receivable?
3. Which accounts have subsidiary ledgers aside from accounts receivable?
Rubric for scoring
Properly and correctly filled-out columns of the subsidiary ledger shall earn 2 points each.
Incorrectly filled columns shall earn no point.
Activity 3
Utilizing the given problem from the previous activity, prepare a subsidiary ledger for the
Accounts Payable account.
Procedures:
1. Identify which from the given transactions affects the accounts payable account.
2. Prepare a subsidiary ledger for accounts payable using the following format.
3. Reconcile the balance of the account with the balance that appear in the General Ledger.
Guide Questions:
1. What is an accounts payable subsidiary ledger?
2. Can you illustrate the format of an accounts payable subsidiary ledger?
3. What do you think is the difference between the accounts receivable subsidiary ledger and
accounts payable subsidiary ledger?
Rubric for scoring
Properly and correctly filled-out columns of the subsidiary ledger shall earn 2 points each.
Incorrectly filled columns shall earn no point
61
Closure
In this activity, I learned that _____________________________________________
___________________________________________________________________
___________________________________________________________________
References
Fundamentals of Accountancy Business and Management 1, J.P.Florendo, 2016, p. 167
https://accounting-simplified.com
https://www.accountingcoach.com/blog/what-is-a-general-ledger
https://www.investopedia.com/terms/a/accounts-receivable-subsidiary-ledger.asp
Answer Key:
Activity 1
62
63
Answer Key
Activity 2
Answer Key
Activity 3
64
65
Section: ________________________________________ Date: _____________________

Debit and Credit
Account Type Normal balance Debit Credit

Asset Debit To increase the To decrease the
account account
Liability Credit To decrease the To increase the
account account
Owner’s Equity Credit To decrease the To increase the
account account
Revenue Credit To decrease the To increase the
account account
Expense Debit To increase the To decrease the
account account
Based in the above summary, increase in an account takes place in the side of its normal balance
while a decrease in the account takes place on the opposite side of its normal balance.
Recall also the so called contra accounts. Contra accounts can be seen right below the paired
(related) account to arrive at the net amount. It normally appears as a reduction below the paired
(related a) account to get the net amount. Since contra account reduces the paired (related )
account expect that its normal balance is opposite to the paired(related )account.(Examples of
contra accounts-Allowance for Doubtful accounts, Accumulated Depreciation, Sales Discounts,
Sales Returns and Allowances ,Purchases Discount, Purchase Returns and Allowances ,etc.)
66
Learning Competency
Analyze common business transactions using the rules of debit and credit ABM_FABM11- IIIg-
j27
Activity 1 Rules of Debit and Credit
Instruction: Complete the table below. The first item has been done for you.
List of Accounts Classification Normal Increased by Decreased by
Balance
(Asset, Liabilities, (Debit/ (Debit/
Owner’s Equity (Debit/ Credit) Credit) Credit)
,Revenue,
Expense)
1 Cash Asset Debit Debit Credit
3 Merchandise Inventory
4 Prepaid Insurance
5 Supplies
6 Office Equipment
7 Transportation
Equipment
8 Building
9 Land
10 Intangible Assets
11 Accounts Payable
12 Notes Payable
13 Salaries Payable
14 Utilities Payable
15 Liam,Capital
16 Liam.Withdrawal
17 Sales
18 Interest Income
67
19 Cost of Sales
20 Purchases
21 Freight In
22 Salaries Expense
23 Supplies Expense
24 Utilities Expense
25 Communication
Expense
26 Travel Expense
27 Rent Expense
28 Insurance Expense
29 Advertising Expense
30 Delivery Expense
Guide Questions:
1. Can you still recall the account tittles that can be seen in the chart of accounts?
2. What are the normal balances of these accounts?
3. When to debit or credit the accounts?

Instruction: Complete the table below. The first item has been done for you.
Accounts Normal Balance Increased by Decreased by
(Debit/ Credit) (Debit/ Credit) (Debit/ Credit)
Allowance for Doubtful Credit Credit Debit
accounts
Accumulated
Depreciation
Owner’s Withdrawal
Sales Discount
68
Sales Returns
Allowances
Purchase Discount
Purchase Returns and
Allowances
Guide Questions:
1. What are contra accounts?
2. How are these accounts presented?
3. What is the effect of these contra accounts to their paired (related) accounts?

Instruction: Underline the correct word to complete the sentences.
1. If I want to increase the asset account, I will (debit, credit) the asset account.
2. If I want to decrease the asset account, I will (debit, credit) the asset account.
3. If I want to increase the liability account, I will (debit, credit) the liability account.
4. If I want to decrease the liability account. I will (debit, credit) the liability account.
5. If I want to increase the owner’s equity account, I will (debit, credit) the owner’s
equity account.
6. If I want to decrease the owner’s equity account, I will (debit, credit )the owner’s
equity account
7. If I want to increase the revenue account, I will (debit, credit) the revenue account.
8. If I want to decrease the revenue account, I will (debit, credit) the revenue account.
9. If I want to increase my expense account, I will (debit, credit) the expense account.
10. If I want to decrease my expense account , I will (debit, credit) the expense account
Guide Questions
2. Can you still recall the rules of debit and credit?
Rubric :
Activity Advanced Competent Developing Beginner
-Students got -Students got 85- -Students got -Students got 74%
90% and above 89% of the total 75-84% of the and below
of the total items items. total items.
-Students show
show less
poor
understanding
69
-Student shows -Students show of the understanding of
mastery of the understanding of competency the
competency the competency. Competency(10)
(14)
(20) (17)
1
Closure
Complete the statements below.
1. I learned that in analyzing business transactions _________________________
______________________________________________________________________________
______________________________________________________________________________
_____________________________________________
2. Knowledge on the elements of accounting equation_______________________
______________________________________________________________________________
______________________________________________________________________________
_____________________________________________
References:
Ballada, Susan and Ballada Win,Accounting Fundamentals,2012 edition,DomDane
Publishers,Manila Philippines
Florendo, Joselito G.,Fudamentals of Accountancy, Business and Management 1,Rex Book
Store,Manila,Philippines
https://www.accountingformanagement.org/rules-of-debit-and-credit/
https://study.com/academy/lesson/using-the-accounting-equation-analyzing-business-
transactions.html
70
Answer Key
List of Accounts Classification(Asset, Normal Increased Decreased

Liabilities, Owner’s Balance by Debit/ by Debit/
Equity ,Revenue, Credit Credit
(Debit/
Expense)
Credit)
1 Cash Asset Debit Debit Credit
2 Accounts Receivable Asset Debit Debit Credit
3 Merchandise Asset Debit Debit Credit
Inventory
4 Prepaid Insurance Asset Debit Debit Credit
5 Supplies Asset Debit Debit Credit
6 Office Equipment Asset Debit Debit Credit
7 Transportation Asset Debit Debit Credit
Equipment
8 Building Asset Debit Debit Credit
9 Land Asset Debit Debit Credit
10 Intangible Assets Asset Debit Debit Credit
11 Accounts Payable Liability Credit Credit Debit
12 Notes Payable Liability Credit Credit Debit
13 Salaries Payable Liability Credit Credit Debit
14 Utilities Payable Liability Credit Credit Debit
15 Liam,Capital Owner’s Equity Credit Credit Debit
16 Liam.Withdrawal Owner’s Equity Debit Debit Credit
17 Sales Revenue Credit Credit Debit
18 Interest Income Revenue Credit Credit Debit
19 Cost of Sales Expenses Debit Debit Credit
20 Purchases Expenses Debit Debit Credit
71
21 Freight In Expenses Debit Debit Credit
22 Salaries Expense Expenses Debit Debit Credit
23 Supplies Expense Expenses Debit Debit Credit
24 Utilities Expense Expenses Debit Debit Credit
25 Communication Expenses Debit Debit Credit
Expense
26 Travel Expense Expenses Debit Debit Credit
27 Rent Expense Expenses Debit Debit Credit
28 Insurance Expense Expenses Debit Debit Credit
29 Advertising Expense Expenses Debit Debit Credit
30 Delivery Expense Expenses Debit Debit Credit

Contra Accounts Normal Balance Increased by Decreased by
(Debit/ Credit) (Debit/ Credit) (Debit/ Credit)
Allowance for Doubtful Credit Credit Debit
accounts
Accumulated Credit Credit Debit
Depreciation
Owner’s Withdrawal Debit Debit Credit
Sales Discount Debit Debit Credit
Sales Returns Debit Debit Credit
Allowances
Purchase Discount Credit Credit Debit
Purchase Returns and Credit Credit Debit
Allowances

1. Debit
2. Credit
72
3. Credit
4. Debit
5. Credit
6. Debit
7. Credit
8. Debit
9. Debit
10. Credit
73
Section: ________________________________________ Date: _____________________

Business Transaction Analysis

We analyze the transaction to tell whether the transaction is a financial or a non-financial
transaction. A transaction has a financial effect if it affects the accounting equation and it is
measurable.
Purchase of goods and providing of services for a fee are examples of financial transaction
because it affect the elements of the accounting equation. Hiring of employees, sending a pricelist
to a prospect customer and business received recognition as one of the best businesses in town, are
few examples of non -financial transaction because the elements of the accounting equation are
not affected.
Transactions that are measurable and have financial effect must be recorded in the book
of accounts.
Learning Competency
Solve simple problems and exercises in the analysis of business transactions.  
ABM_FABM11- IIIg-j-28
Activity 1 Financial or Non- Financial Transaction

Instruction: Identify whether the following is a financial or a non-financial transaction. Write F if
it is a financial transaction and write N if it is a non-financial transaction. Write your answer on
the space provided before the number.
______1.Owner invested P100, 000 to the business.
______2.Purchased P5, 000 for business use.
______3.Rendered service to a client and received P5,000.
______4.Rendered service to a client amounting to P3,000 on account.
74
______5.Acquired transportation equipment amounting to P300,000.
______6. Hired office personnel.
______ 7. Recognize as the best business in town.
______8. Acquired computer equipment and paid P30, 000.
______9.Owner is planning to buy a land and building for office use.
______10.The business owner sends a price list of their products to a prospect customer.
Guide Questions
1. What is a business transaction?
2. Can you differentiate a financial from a non-financial transaction?
3. Why do we need to analyze business transactions?
Activity 2 Analysis of Simple Business Transaction

Instructions:
1. Fill in the blanks with the word increase or decrease together with their
corresponding amounts in the analysis part of every item.
2. Fill in also the blanks with the correct accounts together with their corresponding
amounts in the Rules of Debit and Credit part in every item. Accounts are provided in
every item to choose from, all you need to do is to place the accounts either in the debit
or credit side.
June 1 Czar is an accountant. After long years of being employed he decided to put up
his own business. He made an initial investment amounting to P500, 000 to start
this endeavor.
Analysis:
Asset is ____________ by P___________
Owner’s Equity is ___________ by_________
Rules of Debit and Credit
Accounts to use (Cash: Czar,Capital)
Debit: _____________ P___________
Credit: _____________ P___________
June 3 Acquired 1 computer for office use, P40,000.
75
Analysis:
One asset is _____________ by P_________
Another asset is ____________by P___________
Rules of Debit and Credit(Cash: Computer Equipment)

Accounts to use (Cash: Computer Equipment)
Debit: _____________ P___________
Credit: _____________ P___________
June 7 Rendered service to Mr.O amounting to P10,000 on account.

Analysis:
Asset is _____________ by P_________
Revenue is ____________by P___________
Accounts to use (Accounts Receivable : Service income)
Debit: _____________ P___________
Credit: _____________ P___________
June 9 Rendered service to Mr. Po, receiving a cash of P20,000.
Analysis:
Asset is _____________ by P_________
Revenue is ____________by P___________

Accounts to use (Cash : Service income)
Debit: _____________ P___________
Credit: _____________ P___________
June 13 Purchased office supplies amounting P5,000 on account.

Analysis:
Asset is _____________ by P_________
76
Liability is ____________by P___________
Accounts to use (Supplies : Accounts Payable)
Debit: _____________ P___________
Credit: _____________ P___________
June 15 Paid rent for the month amounting P5,000
Analysis:
Asset is _____________ by P_________
Expense is ____________by P___________

Accounts to use (Cash: Rent Expense)
Debit: _____________ P___________
Credit: _____________ P___________
June 16 Paid salaries of employee P15,000.

Analysis:
Asset is _____________ by P_________
Expense is ____________by P___________

Accounts to use (Cash: Salary Expense)
Debit: _____________ P___________
Credit: _____________ P___________
June 19 Borrowed P250,000 from a bank.

Analysis:
Asset is _____________ by P_________
Liability is ____________by P___________
77
Accounts to use (Cash: Loan Payable)
Debit: _____________ P___________
Credit: _____________ P___________
June 20 Withdrew P50,000 for personal use.

Analysis:
Asset is _____________ by P_________
Owner’s Equity is ____________by P___________

Accounts to use (Cash: Czar, Withdrawal)
Debit: _____________ P___________
Credit: _____________ P___________
June 26 Paid water and electric bill amounting to P7,000.
Analysis:
Asset is _____________ by P_________
Owner’s Equity is ____________by P___________

Accounts to use (Cash: Utilities Expense)
Debit: _____________ P___________
Credit: _____________ P___________
June 28 Bought land amounting to P300,000 for office use.
Analysis:
Asset is _____________ by P_________
Another asset is ____________by P___________

Accounts to use (Cash: Land)
78
Debit: _____________ P___________
Credit: _____________ P___________
June 30 Bought Office equipment amounting to P100,000 paying P30,000 and the balance
to paid next month.
Analysis:
Asset is _____________ by P_________
Another asset is ____________ by P___________
Liability is ______________by P____________

Accounts to use (Cash: Office Equipment: Accounts Payable)
Debit: _____________ P___________
Credit: _____________ P___________
Credit: _____________ P___________
Guide Questions
1. Can you still recall the rules of debit credit?
2. How do we increase or decrease an account?
3. Do you agree that debit means to increase an account and credit means to decrease an
account?
Activity 3 Analysis of Simple Business Transaction

Multiple Choice. Read each question carefully. Select the best answer from the choices by
writing the letter of your choice before the number.
1. Which of the following will most likely increase the liability account by P50,000?
A. Bought computer equipment P100,000, paying P50,000 and the balance on account.
B. Paid P50, 000 to settle the account in full for the equipment acquired last month.
C. Bought P50,000 worth of office supplies.
D. Owner invested P50,000 to the business.
2. Which of the following will most likely increase the asset account by P60,000?
A. Debit : Accounts Receivable P60,000
B. Debit: Accounts Payable P60,000
C. Debit: Withdrawal P60,000
79
D. Debit: Rent Expense P60,000
3. Which of the following transaction results to a decrease in the asset account?
A. Paid P50, 000 to settle the account in full for the equipment acquired last month
B. Acquired office equipment worth P60, 000 on account
C. Owner invested P5, 000 for personal use
D. Borrowed P100,000 from the bank
4. Which among the transactions will result to a debit to an expense account and a credit to
asset account?
A. Paid salaries of employees
B. Collection from customers
C. Paid office equipment
D. Accrual of salary for the month.
5. Which among the transactions will result to an increase in expense account and increase
in liability account?
A. Paid salaries of employees
B. Collection from customers
C. Paid office equipment
D. Accrual of salary for the month.
6. The bookkeeper debited an asset account and credited a liability account. Which among
the transactions could possibly result to this effect?
A. Full settlement of an account to a supplier
B. Cash collection from customer
C. Withdrawal of owner for personal use
D. Sold merchandise on account.
7. Mr. A is a bookkeeper of a rice retailing business. The business purchased a table and
paid P10,000. He recorded the transaction by debiting Cash P10,000 and crediting
Accounts Payable P10,000. Do you think he recorded the transaction correctly?
A. Yes. The transaction was recorded correctly.
B. No. The entry should be
Debit: Cash P10, 000
Credit: Furniture and Fixtures P10, 000.
C. No. The entry should be
Debit: Furniture and Fixtures P10, 000
Credit: Cash P10, 000.
D. No. The entry should be
Debit: Furniture and Fixtures P10, 000
Credit: Owner’s, Capital P10, 000.
8. Which of the following transactions result in an increase in liability account?
A. Borrowing of money in a bank
B. Purchases on account
80
C. Acquisition of an asset account made a down payment and the remaining balance on
account
D. All of the above.
9. Which of the following transactions reduce the owner’s equity account?
A. Income from the business
B. Losses from the business
C. Additional investment from the owner
D. Purchase of Equipment
10. Which among the following transactions result to an increase the revenue account?
A. Rendered bookkeeping services to customer.
B. Received advance payment for services to be rendered.
C. Accrual of expenses
D. Payment of utilities
Guide Questions
1. What are the elements of an expanded accounting equation?
2. Can you still remember the different accounts in your chart of accounts?
3. Can you give example of transactions which results to an increase or decrease in an
account?
Rubric
Activity Advanced Competent Developing Beginner
-Students got 90% -Students got 85- -Students got -Students got
and above of the 89% of the total 75-84% of the 74% and below
total items items. total items. -
-Students show
Students show
-Student shows -Student shows poor
less
mastery of the understanding of understanding
understanding
competency the competency. of the
of the
competency(10)
(20) (17) competency
(14)
1
81
Closure:
Complete the statements below.
1. I learned in this activity that in analyzing business transaction we need to
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
_____________________
2. Knowing the rules of debit and credit helps me a lot in analyzing business transactions
because__________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
_____________________
References:
Ballada, Susan and Ballada Win,Accounting Fundamentals,2012 edition,DomDane
Publishers,Manila Philippines
Florendo, Joselito G.,Fudamentals of Accountancy, Business and Management 1,Rex Book
Store,Manila,Philippines
https://www.accountingformanagement.org/rules-of-debit-and-credit/
https://study.com/academy/lesson/using-the-accounting-equation-analyzing-business-
transactions.html
Answer Key
Activity 1 Financial or Non-Financial Transaction
1.F
2.F
3.F
4.F
5.F
6.N
82
7.N
8.N
9.N
10.N
Activity 2 Analysis of Business Transaction
June 1 Analysis
Asset: (Increase: P500, 000)
Owner’ Equity :( Increase: P500, 000)
Debit: (Cash: P500, 000)
Credit: Czar, Capital: P500, 000)
June 3 Analysis
Asset :( Increase: P 40,000)
Debit: (Computer Equipment: P40, 000)
Credit: (Cash: P40, 000)
June 7 Analysis
Revenue: :( Increase: P10, 000)
Debit: (Accounts Receivable: P10, 000)
Credit: Service Income: P10, 000)
June 9 Analysis
Revenue: :( Increase: P20, 000)
Credit: (Service Income: P20, 000)
June 13 Analysis
83
Liability: :( Increase: P5, 000)
Debit: (Supplies: P5, 000)
Credit: (Accounts Payable: P5, 000)
June 15 Analysis
Asset: (Decrease: P5, 000)
Expense: :( Increase: P5, 000)
Debit: (Rent Expense: P5, 000)
June 16 Analysis
Debit: (Salary Expense: P15, 000)
June 19 Analysis
Asset: (increase: P250, 000)
Liability: :( Increase: P250, 000)
Credit: (Loan Payable: P250, 000)
June 20 Analysis
Asset: (increase: P50, 000)
Owner’s Equity: :( Decrease: P50, 000)
Debit: (Czar, Withdrawal: P50, 000)
84
June 26 Analysis
Debit: (Utilities Expense: P7, 000)
June 28 Analysis
Asset: :( Decrease: P300, 000)
Debit: (Land: P300, 000)
June 30 Analysis
Asset: (Increase: 100, 000)
Asset: :( Decrease: P30, 000)
Liability:( Increase:P70,000)
Debit: (Office Equipment: P100, 000)
Credit: (Accounts Payable:P70,000)
Activity 3
1. A
2. A
3. A
4. A
5. A
6. A
7. C
8. D
9. B
10. A
85
Section: ________________________________________ Date: _____________________

Nature of Transactions in a Service Business

Any commercial organization engaged in an activity that provides service to clients for
profit is called a “service business”. In general, service businesses have no physical product
actually sold to clients; instead, their product is “service”. Their service is primarily designed to
assist or facilitate the work of clients.
A transaction may be business or non-business transactions. A transaction that has an effect
on the accounting equation, is a business transaction. Otherwise, it is a non-business transaction.
Learning Competency with Code:

Describes the nature of transactions in a service business. (ABM_FABM11-IVa-d-29)
Activity 1
Look at the pictures below. What can you say about them? Describe their similarities and
differences.
86
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
___________________________
Guide Questions:
a. What are the three types of businesses according to activities?
b. Explain the nature of each types of businesses?
Rubrics for Scoring:
Criteria Rating
Content and ideas are organized in a clear, logical 1 2 3 4 5
manner
The writing directly addresses the topic and provides 1 2 3 4 5
adequate discussion supporting the main idea
The writing employs standard grammar conventions, 1 2 3 4 5
proper punctuation, and proper word choice
The sentences are well constructed with varied 1 2 3 4 5
structure
87
Total (20 pts)
Activity 2
Identify whether each transaction is a business or a non-business transaction. Put a check on the
column which identifies the nature of the transactions.
Mr. Deryo Laban opened his laundry business last June 2020. The following transactions occurred
during the month:
Non-
Transaction Business
Business
1. Invested P300,000 to his business. The trade name of
the business was “MR. LABANDERYO”.
2. Hired Kath and James who will manage his business
with a monthly salary of P6,000 each.
3. Purchase store supplies from Labada Store- P10,000.
4. MR. LABANDERYO entered into an exclusive
contract with RAC Hotel where the business will do
all the laundry of the Hotel.
5. Collections from various customers for the day
amounting to P15,000.
6. Mr. Deryo Laban signs a subscription contract for an
internet plan at P999 per month which will be due at
the end of each month.
7. Purchase store supplies worth P10,000 from Mr. Clean
Store.
8. Mr. Deryo Laban orders laundry equipment worth
P50,000 from Abenson.
9. Paid the salary of the employees for the month,
P8,000.
10. Mr. Deryo Laban needed money for the hospitalization
of his son. He withdrew P5,000 from the business.
Guide Questions:
a. Does it affect the composition of either assets, liabilities, equity, revenues, or expenses?
b. Is there a monetary amount that can be assigned to the transaction?

SCORE DESCRIPTION
1 The student has identified correctly the nature of the transaction.
88
0 The student has identified erroneously the nature of the transaction.
Activity 3
Give one service business transaction for the given effects on accounting elements.
1. Increase in one asset and decrease in another asset

2. Increase in asset and increase in liability
3. Increase in asset and increase in owner’s equity
4. Decrease in one liability and increase in another liability
5. Decrease in owner’s equity and decrease in asset
6. Increase in liability and increase in expense
7. Increase in asset and increase in revenue
8. Decrease in asset and increase in expense
9. Decrease in asset and decrease in liability
10. Decrease in liability and increase in owner’s equity
Guide Questions:
c. What is a business transaction?
d. How do revenue and expenses affect the owner’s equity account?

SCORE DESCRIPTION
The student has demonstrated a full and complete understanding of the
accounting concepts by writing a service business transaction given its effect
2 and has a mastery on the normal balances of each element. The response
may, however, contain minor flaws that do not detract from a demonstration
of full understanding.
The student has demonstrated merely an acquaintance with the topic, or
provided a completely incorrect or uninterpretable response. There are
1
significant omissions and irregularities that indicate a lack of comprehension
in regard with its content.
0 No answer at all
Closure:
In this activity, I learned that
______________________________________________________________________________
______________________________________________________________________________
89
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
_________________________________________________________
References for Learners:

RBS Fundamentals of Accountancy, Business, and Management 1, 1st ed.
Teacher’s Guide: Fundamentals of Accountancy, Business, and Management 1.
Fundamentals of Accountancy, Business, and Management 1, c2016, Vibal Group, Inc.
Valencia, et.al (2003-2004). Basic Accounting International ed. Valencia Educational Supply
Answer Key
Activity 1: Answers may vary
Activity 2:
Non-
Transaction Business
Business
1. Invested P300,000 to his business. The trade name of
the business was “MR. LABANDERYO”.
2. Hired Kath and James who will manage his business
with a monthly salary of P6,000 each.
3. Purchase store supplies from Labada Store - P10,000.
4. MR. LABANDERYO entered into an exclusive

contract with RAC Hotel where the business will do
all the laundry of the Hotel.
5. Collections from various customers for the day
amounting to P15,000.
6. Mr. Deryo Laban signs a subscription contract for an
internet plan at P999 per month which will be due at
the end of each month.
7. Purchase store supplies worth P10,000 from Mr.
Clean Store.
8. Mr. Deryo Laban orders laundry equipment worth
P50,000 from Abenson.
9. Paid the salary of the employees for the month,
P8,000.
10. Mr. Deryo Laban needed money for the
hospitalization of his son. He withdrew P5,000 from
the business.
90
Activity 3 (Sample Answer):
SERVICE BUSINESS TRANSACTIONS
1. The business purchased office supplies for P10,000 cash from Pandayan
Bookstore.
2. Purchased medical equipment for P50,000 from Golden Medical Supplies on

account.
3. Mr. Covido started his medical clinic by investing P500,000 as his initial
investment.
4. Mr. Covido issued promissory to Golden Medical Supplies to replace the

accounts payable.
5. Mr. Covido withdrew P10,000 cash from the business for personal use.
6. Received electricity bill from Iselco amounting to P5,600.
7. Rendered medical treatment to Mrs. Corona P50,000 on account.
8. Paid the secretary’s salary for the month for P8,000.
9. Paid the electricity consumption for the month which was recorded as utilities
payable.
10. Completed the service obligation which was paid by the client in advance.
91
Section: ________________________________________ Date: _____________________

Journalizing Business Transactions

Journalizing is the process of recording a business transaction in the form of an accounting
entry in the “journal” or the so-called “book of the original entry”. The simplest journal is the
General Journal. A General Journal is a chronological record of all company’s events or business
transactions showing all the effects of each transaction listed by date.
Learning Competency:
Record transactions of service business in the general journal. (ABM_FABM11-IVa-d-30)
Activity 1
Analyze the following business transaction of “Barkada Chams Travel”. Journalize the business
transactions by following the rules of debits and credits.
Use the following account titles: Cash, Accounts Receivable, Prepaid Insurance, Furniture and
Fixtures, Office Equipment, Accounts Payable, Notes Payable, Utilities Payable, Loan Payable,
Paul, Capital, Paul, Drawing, Service Revenue, Salaries and Wages Expense, Utilities Expense.
Paul decided to put up a travel agency. Below are the transactions for the month of June.
June 1 Paul invested cash of ₱ 1,500,000 in the business.
2 Paid Insular Life Insurance Co. P20,000 for one-year insurance of the agency.
3 Borrowed ₱350, 000 from BDO Unibank.
5 Hired office staffs with P10,000 monthly salary.
8 Bought furniture from Jim’s amounting to ₱50,000.
10 Acquired office equipment from Abenson’s P100,000 paying 40,000 and promise
to pay the balance at the end of the month.
12 Withdraw cash ₱ 50,000 for personal use.
15 Rendered services from the Happy Travels ₱650,000 on account.
18 Received bill from PLDT, P1,200.
25 Paid employees’ salaries for the month, P60,000.
92
29 Paid electricity bills for the month, P5,000.
30 Collected account from Happy Travels.
30 Paid the balance of the amount owed to Abenson’s.
Date Account Titles & Explanation Ref. Debit Credit

2020
June 1 Cash 1,500,000
Paul, Capital 1,500,000
To record initial investment
2 _______________________ _________
__________________ _________
To record payment of 1-year
insurance
3 _______________________ _________
__________________ _________
To record borrowed money
from the bank
5 _______________________ _________
__________________ _________
8 _______________________ _________
__________________ _________
To record purchase of furniture
on cash basis
10 _______________________ _________
__________________ _________
__________________ _________
To record purchase of office
equipment on instalment basis
12 _______________________ _________
__________________ __________
To record owner’s personal
withdrawal
15 _______________________ _________
__________________ __________
To record client’s billed for
services rendered
93
18 _______________________ __________
__________________ _________
To record invoice of PLDT bill
25 _______________________ __________
__________________ _________
To record payment of salaries
29 _______________________ __________
__________________ _________
To record payment of electricity
30 _______________________ __________
__________________ _________
To record the collection of
client’s account in full
30 _______________________ __________
__________________ _________
To record the payment of the
balance of the amount owed
Guide Question:
a. Why is there a need to prepare journal entries?
b. What are the steps in journalizing transactions?
c. Why was hiring an employee not included in the journal?
Rubric for Scoring:

SCORE
DESCRIPTION
(per Account Title)
The student recorded correctly the appropriate account title and its
2
corresponding amount in the debit or credit.
The student recorded correctly the appropriate account title but
1
erroneously inputted the amount in the debit or credit, or vice versa.
The student recorded erroneously both the account title and its
0
corresponding amount.
94
Activity 2
Analyze the following business transaction of “Coco Repair Shop”. Prepare the appropriate journal
entries of the following business transactions in the General Journal.
Use the following account titles: Cash, Accounts Receivable, Repair Tools, Repair Supplies,
Prepaid Rent, Furniture and Fixtures, Service Equipment, Accounts Payable, Notes Payable,
Cardo, Capital, Cardo, Drawing, Service Revenue, Advertising Expense, Salaries and Wages
Expense, Utility Expense, Rent Expense, Taxes and Licenses.
The company’s business transactions in June, the first month of operations, are described below:
TRANSACTIONS
June 2020
1 – Cardo opened an appliance repair shop he called “Coco Repair Shop”. He began
business by investing P100,000 cash, repair tools-40,000, repair supplies- 18,000 and a
truck -150,000.
2 –Rented space and paid two months rent in advance, P10,000.
3 – Paid P2, 500 for newspaper advertising announcing the opening of his shop.
5 – Purchased office tables and chairs and filing cabinets from Martin’s Furniture on
account, P20,500.
9 – Completed repair work for Ms. Alyanna on account, P3,500.
10 – Cardo orders 5 boxes of repair supplies from the hardware at P250 per box.
12 – Completed repair work for Mr. Hipolito P 4,300. Accepted P 2,000 cash and a
promise to pay the balance after ten days.
15 – Paid the wages of the shop helper, 3, 000.
18 – Paid one-half of the account due to Martin’s Furniture and issued a promissory note
for the other half.
22 – Ms. Alyanna paid her account in full.
24 – Withdrew cash for P5,000 for personal use.
26- Received P30,000 from various customers for repair service rendered.
29- Paid the monthly electricity bill and water bill, P 2,300 and P 600, respectively.
30- Paid taxes for P2, 000.
95
30- Paid the wages of the shop helper P 3, 000.
Answer Sheet
GENERAL JOURNAL Page 1
Date Particulars Ref. Debit Credit
2020
96
2020
97
98
Guide Question:
a. What is the purpose of the General Journal?
b. When does a company record a transaction in the General Journal?
c. Differentiate simple journal entry from compound journal entry.
Rubric for Scoring:

SCORE 1 point each
0 point
(per transaction) (for debit, credit, explanation)
The student recorded correctly The student recorded
the appropriate account title and erroneously the appropriate
Debit its corresponding amount in the account title and/or its
debit account. corresponding amount in the
debit account.
Credit its corresponding amount in the account title and/or its
credit account. corresponding amount in the
credit account.
99
The student wrote an explanation The student wrote an
which really describe the explanation which did not
Explanation
transaction clearly. describe the transaction, or no
explanation at all.
Activity 3
Analyze and journalize the following business transactions of “TMAC Audit Firm”. Record the
transactions in the General Journal.
Miss Minchin decided to put up an audit firm called “TMAC Audit Firm”. Below are the
transactions for the month of June.
June
2020
1
Miss Minchin invested P300,000 cash in the business.
2 Paid P10,000 to city hall for a business permit.
3 Purchased table and chairs, P22,000 and office equipment for P28,000 from
Venus Home Furniture and Equipment on credit.
3 Paid P2,500 cash to a local newspaper for advertising the opening of the audit
firm.
4 Paid Insular Life Insurance Co. P15,000 for one-year insurance of the firm.
5 Rendered audit services to Mrs. Sarah Garcia P21,000 on account.
8 Purchased office supplies from Tess Variety Store on credit P10,200.
10 Billed Mr. Bong Sy on account for P25,000.
11 Paid P20, 000 to Venus Home Furniture and Equipment as partial settlement of
the account.
12 Borrowed P100,000 from BDO Unibank.
15 Paid Tess Variety Store the full amount due to it.
17 Paid the monthly rent of the space P5,000.
18 Paid the salary of the secretary, P4,000.
22 Collected P5, 000 from Mrs. Sarah Garcia as partial settlement of her account.
100
23 Received P16,500 from various clients for the services rendered.
25 Paid the electricity, water and telephone bills for the month amounting to
P3,200, P800, and P 1,200, respectively.
26 Purchased additional office equipment for P30, 000, paying P5,000 and issuing
a note for the remaining P25,000.
28 Withdrew P8, 000 for personal use.
30 Paid taxes for P1,500.
Answer Sheet
101
102
103
104
105
Guide Question:
a. What are the essential parts of a General Journal? Discuss.
b. Why is posting reference not used in when transactions are recorded in the journal?

SCORE 1 point each
0 point
(per transaction) (for debit, credit, explanation)
Debit its corresponding amount in the account title and/or its
debit account. corresponding amount in the
debit account.
Credit its corresponding amount in the account title and/or its
credit account. corresponding amount in the
credit account.
The student wrote an explanation The student wrote an
which really describe the explanation which did not
Explanation
transaction clearly. describe the transaction, or no
explanation at all.
Closure:
106
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
___________________________________________________
References:
Fundamentals of Accountancy, Business, and Management 1,c2016, Vibal Group, Inc.
Accounting Cycle (n.d) Retrieved from http://www.investopedia.com/terms/a/accounting-
cycle.asp
Answer Key
Activity 1:
Date Account Titles & Explanation Ref. Debit Credit

2020
June 1 Cash 1,500,000
Paul, Capital 1,500,000
2 Prepaid Insurance 20,000

Cash 20,000
To record payment of 1-year
insurance
3 Cash 350,000
Loan Payable 350,000
To record borrowed money
from the bank
5 No entry
107
8 Furniture and Fixtures 50,000
Cash 50,000
To record purchase of furniture
on cash basis
10 Office equipment 100,000

Cash 40,000
Accounts Payable 60,000
To record purchase of office
equipment on instalment basis
12 Paul, Drawing 50,000

Cash 50,000
withdrawal
15 Accounts Receivable 650,000

Service Revenue 650,000
To record client’s billed for
services rendered
18 Utilities Expense 1,200

Utilities Payable 1,200
To record invoice of PLDT bill
25 Salaries and Wages Expense 60,000

Cash 60,000
To record payment of salaries

Cash 5,000
To record payment of electricity
30 Cash 650,000
Accounts Receivable 650,000
To record the collection of
client’s account in full
30 Accounts Payable 60,000

Cash 60,000
To record the payment of the
balance of the amount owed
108
Activity 2:
2020
June 1 Cash 100,000
Repair Tools 40,000
Repair Supplies 18,000
Service Equipment 150,000
Cardo, Capital 308,000
2 Prepaid Rent 10,000

Cash 10,000
To record advance payment of rent
3 Advertising Expense 2,500

Cash 2,500
To record payment of advertising
5 Furniture and Fixtures 20,500

To record purchase of furniture and
fixtures on account

To record clients billed for services
109
rendered
10 No entry
12 Cash 2,000
To record partial payment from client
for services rendered

Cash 3,000
To record payment of helper’s wage

Cash 10,250
Notes Payable 10,250
To record partial payment of account
and issuance of note for the balance
2020
June 22 Cash 3,500
To record collection of client’s account
110
24 Cardo, Drawing 5,000
Cash 5,000
withdrawal
26 Cash 30,000
To record cash received for services
rendered

Cash 2,900
To record payment of electricity and
and water bill for the month
30 Taxes and Licenses Expense 2,000

Cash 2,000
To record payment of tax

Cash 3,000
To record payment of helper’s wage
111
Activity 3:
2020
June 1 Cash 300,000
Minchin, Capital 300,000

Cash 10,000
To record payment of business permit
3 Furnitures and Fixtures 22,000

Office Equipment 28,000
112
To record purchase of furniture and
office equipment on account
3 Advertising Expense 2,500

Cash 2,500
To record payment of advertising
4 Prepaid Insurance 15,000

Cash 15,000
To record payment of 1year insurance

rendered
8 Office Supplies 10,200

To record purchase of office supplies
on account
10 Account Receivable 25,000

rendered
113
Cash 20,000
To record partial payment to Venus
Home Furniture and Equipment
2020
June 12 Cash 100,000
Loan Payable 100,000
To record borrowed money from the
bank

Cash 10,200
To record full payment to Tess Variety
Store
17 Rent Expense 5,000

Cash 5,000
To record payment of rent
18 Salary Expense 4,000

Cash 4,000
To record payment of salary
22 Cash 5,000
114
To record collection of client’s account
23 Cash 16,500
rendered
25 Utility Expense 5,200

Cash 5,200
To record payment of utilities
26 Office Equipment 30,000

Cash 5,000
Notes Payable 25,000
To record purchase of equipment paying
cash and issued notes for the balance
28 Minchin, Drawing 8,000

Cash 8,000
To record owner’s personal withdrawal
2020
115
June 30 Salary Expense 4,000
Cash 4,000
To record payment of salary

Cash 1,500
To record payment of tax
116
117
FUNDAMENTALS OF ACCOUNTANCY
Name of the Learner: ________________________________ Grade Level: _________
Section: ___________________________________________ Date: _______________

Posting to the Ledger

After journalizing, the next step in the accounting cycle is posting. Posting refers to the
procedure of transferring information in the journal to the ledger accounts. It is for this reason that
a ledger is the so-called “book of the final entry”. A ledger contains all the accounts maintained
by the business. It is used to accumulate and classify individual transactions from the journal. The
transactions recorded in the general journal are posted to the general ledger at the end of each day,
week or month depending on the needs of the business to update the account balances.
Learning Competency:
Posts transactions in the ledger. (ABM_FABM11-IVa-d-31)
Activity 1
Based from the given general journal, post the transactions in the general ledger.
Mr. Vico started to started his own consultancy firm in June 2020. During the first month of his
business, he journalized the following transactions in the business’ General Journal.
2020
June 1 Cash 200,000
Vico, Capital 200,000
To record owner’s initial investment
3 Office Equipment 25,000

Cash 25,000
118
To record the purchase of one
computer unit.

rendered
15 Office Supplies 5,000

To record purchase of office supplies
on account
18 Cash 10,000
rendered
23 Cash 5,000
To record partial payment of client’s
account
28 Vico, Drawing 5,000

Cash 5,000
To record owner’s personal withdrawal
119
30 Salaries Expense 4000
Cash 4000
To record payment of secretary’s salary
Answer Sheet
GENERAL LEDGER
Account Title: CASH Account No. 101
Date Explanation Ref. Debit Credit Balance
2020
GENERAL LEDGER
Account Title: Accounts Receivable Account No. 102
GENERAL LEDGER
Account Title: Office Supplies Account No. 103
GENERAL LEDGER
Account Title: Office Equipment Account No. 104
120
GENERAL LEDGER
Account Title: Accounts Payable Account No. 201
GENERAL LEDGER
Account Title: Vico, Capital Account No. 301
GENERAL LEDGER
Account Title: Vico, Drawing Account No. 302
GENERAL LEDGER
Account Title: Service Revenue Account No. 401
121
GENERAL LEDGER
Account Title: Salaries and Wages Expense Account No. 501
Guide Question:
1. Differentiate general journal from a general ledger.
2. Is every transaction posted immediately to the ledger? Why or why not?
Rubric for Scoring:

SCORE 1 point each (post per date
0 point
(per Ledger) and ending balance)
The student posted correctly and The student posted erroneously

completely the date, the date, explanation, reference
explanation, reference number, number, and/or both the amount
Post per date
and both the amount in the in the debit/credit column and in
debit/credit column and in the the balance column.
balance column.
The student computed the The student computed the
Ending Balance
ending balance accurately. ending balance inaccurately.
metry, M
122
Activity 2
Journalize the business transactions of Coco Repair Shop and post the transactions in the General
Ledger.
Use the following account codes: Cash(101), Accounts Receivable (102), Repair Tools (103),
Repair Supplies (104), Prepaid Rent(105), Furniture and Fixtures (106), Service Equipment (107),
Accounts Payable(201), Notes Payable (202), Cardo, Capital (301), Cardo, Drawing (302), Service
Revenue (401), Advertising Expense(501), Salaries Expense (502), Utilities Expense (503), Taxes
and Licenses (504), Rent Expense (505).
The company’s business transactions in June, the first month of operations, are described below:
TRANSACTIONS
June 2020
1 – Cardo opened an appliance repair shop he called “Coco Repair Shop”. He began
business by investing P100,000 cash, repair tools-40,000, repair supplies- 18,000 and a
truck -150,000.
2 –Rented space and paid two months rent in advance, P10,000.
3 – Paid P2, 500 for newspaper advertising announcing the opening of his shop.
5 – Purchased office tables and chairs and filing cabinets from Martin’s Furniture on
account, P20,500.
9 – Completed repair work for Ms. Alyanna on account, P3,500.
10 – Cardo orders 5 boxes of repair supplies from the hardware at P250 per box.
12 – Completed repair work for Mr. Hipolito P 4,300. Accepted P 2,000 cash and a
promise to pay the balance after ten days.
15 – Paid the wages of the shop helper, 3, 000.
18 – Paid one-half of the account due to Martin’s Furniture and issued a promissory note
for the other half.
22 – Ms. Alyanna paid her account in full.
24 – Withdrew cash for P5,000 for personal use.
26- Received P30,000 from various customers for repair service rendered.
29- Paid the monthly electricity bill and water bill, P 2,300 and P 600, respectively.
30- Paid taxes for P2, 000.
30- Paid the wages of the shop helper P 3, 000.
123
Answer Sheet
GENERAL LEDGER
Account Title: Account No.
2020
GENERAL LEDGER
GENERAL LEDGER
GENERAL LEDGER
124
GENERAL LEDGER
GENERAL LEDGER
GENERAL LEDGER
GENERAL LEDGER
GENERAL LEDGER
125
GENERAL LEDGER
GENERAL LEDGER
GENERAL LEDGER
GENERAL LEDGER
GENERAL LEDGER
126
GENERAL LEDGER
GENERAL LEDGER
GENERAL LEDGER
Guide Question:
1. What are the advantages of the use of a ledger?
2. What are the steps in posting from the Journal to the Ledger?

SCORE 1 point each (post per date
0 point
(per Account) and ending balance)

Post per date completely the date, the date, explanation, reference
explanation, reference number, number, and/or both the amount
and both the amount in the
127
debit/credit column and in the in the debit/credit column and in
balance column. the balance column.
Ending Balance
Activity 3
Journalize the business transactions of TMAC Audit Firm and post the transactions in the
General Ledger.
Miss Minchin decided to put up an audit firm called “TMAC Audit Firm”. Below are the
transactions for the month of June.
June
2020
1
Miss Minchin invested P300,000 cash in the business.
2 Paid P10,000 to city hall for a business permit.
3 Purchased table and chairs, P22,000 and office equipment for P28,000 from
Venus Home Furniture and Equipment on credit
3 Paid P2,500 cash to a local newspaper for advertising the opening of the audit
firm.
4 Paid Insular Life Insurance Co. P15,000 for one-year insurance of the firm.
5 Rendered audit services to Mrs. Sarah Garcia P21,000 on account.
8 Purchased office supplies from Tess Variety Store on credit P10,200.
10 Billed Mr. Bong Sy on account for P25,000.
11 Paid P20, 000 to Venus Home Furniture and Equipment as partial settlement of
the account.
12 Borrowed P100,000 from BDO Unibank.
15 Paid Tess Variety Store the full amount due to it.
17 Paid the monthly rent of the space P5,000.
22 Collected P5, 000 from Mrs. Sarah Garcia as partial settlement of her account.
23 Received P16,500 from various clients for the services rendered.
128
25 Paid the electricity, water and telephone bills for the month amounting to
P3,200, P800, and P 1,200, respectively.
26 Purchased additional office equipment for P30, 000, paying P5,000 and issuing
a note for the remaining P25,000.
28 Withdrew P8, 000 for personal use.
30 Paid taxes for P1,500.
TMAC Audit Firm uses the following chart of accounts:

TMAC AUDIT FIRM
CHART OF ACCOUNTS
ASSETS REVENUE
101 Cash 401 Service Revenue
103 Office Supplies EXPENSES
104 Prepaid Insurance 501 Taxes and Licenses Expense
105 Office Equipment 502 Advertising Expense
106 Furnitures and Fixtures 503 Rent Expense
504 Salaries Expense
LIABILITIES 505 Utility Expense
201 Accounts Payable
202 Notes Payable
203 Loan Payable
CAPITAL
301 Minchin, Capital
302 Minchin, Drawing
Answer Sheet
129
130
131
132
Guide Question:
1. What are the essential parts of the General Ledger? Discuss
2. Compute the total amount of the following:
a. Total Assets
b. Total Liabilities
c. Total Owner’s Equity
d. Total Revenue
e. Total Expenses
133
SCORE 1 point each
(per Ledger) (post per date and ending 0 point
balance)
completely the date, explanation the date, explanation of the
of the transaction, reference transaction, reference number,
Post per date
number, and both the amount in and/or both the amount in the
the debit/credit column and in debit/credit column and in the
the balance column. balance column.
Ending Balance
Closure:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
_________________________________________________________
References:
Fundamentals of Accountancy, Business, and Management 1, c2016, Vibal Group, Inc.
Accounting Cycle (n.d) Retrieved from http://www.investopedia.com/terms/a/accounting-
cycle.asp
Answer Key
Activity 1
GENERAL LEDGER
2020
June 1 Cash Investment of the owner J1 200,000 200,000
3 Purchase of office equipment J1 25,000 175,000
18 Cash received for services rendered J1 10,000 185,000
23 Partial payment of client’s account J1 5,000 190,000
134
28 Withdrawal of cash from the business J2 5,000 185,000
30 Payment of salary J2 4,000 181,000
Balance 181,000
GENERAL LEDGER
2020
June 8 Billed client for services rendered J1 15,000 15,000
23 Partial payment of clients account J1 5,000 10,000
30 Balance 10,000
GENERAL LEDGER
2020
June15 Purchase of office supplies on account J1 5,000 5,000
30 Balance 5,000
GENERAL LEDGER
2020
June 3 Purchase of office equipment J1 25,000 25,000
30 Balance 25,000
GENERAL LEDGER
2020
June15 Purchase of office supplies on account J1 5,000 5,000
30 Balance 5,000
GENERAL LEDGER
Account Title: Vico, Capital Account No. 301
2020
June 1 Investment of capital by the owner J1 200,000 200,000
30 Balance 200,000
135
GENERAL LEDGER
Account Title: Vico, Drawing Account No. 302
2020
June 28 Withdrawal of cash from the business J1 5,000 5,000
30 Balance 5,000
GENERAL LEDGER
2020
June 8 Rendered services on account J1 15,000 15,000
18 Rendered services through cash J1 10,000 25,000
30 Balance 25,000
GENERAL LEDGER
2020
June 30 Payment of salary J1 4,000 4,000
Balance 4,000
Activity 2
GENERAL LEDGER
2020
June 1 Cash Investment of the owner J1 100,000 100,000
2 Payment of advance payment of rent J1 10,000 90,000
3 Payment of advertising J1 2,500 87,500
12 Partial payment from supplier J1 2,000 89,500
18 Partial payment to supplier J1 10,250 76,250
22 Cash collection of client’s account J2 3,500 79,750
136
26 Cash received for services rendered J2 30,000 104,750
29 Payment of utility bills J2 2,900 101,850
30 Payment of tax J2 2,000 99,850
Balance 96,850
GENERAL LEDGER
2020
12 Billed client for services rendered J1 2,300 5,800
22 Collection of clients account J2 3,500 2,300
30 Balance 2,300
GENERAL LEDGER
Account Title: Repair Tools Account No. 103
2020
June 1 Investment of repair tools J1 40,000 40,000
30 Balance 40,000
GENERAL LEDGER
Account Title: Repair Supplies Account No. 104
2020
June 1 Investment of repair supplies J1 18,000 18,000
30 Balance 18,000
GENERAL LEDGER
Account Title: Prepaid Rent Account No. 105
2020
June 3 Advance payment of rent J1 10,000 10,000
30 Balance 10,000
GENERAL LEDGER
Account Title: Furniture and Fixtures Account No. 106
137
2020
June 5 Purchase of furniture on account J1 20,500 20,500
30 Balance 20,500
GENERAL LEDGER
Account Title: Service Equipment Account No. 107
2020
June 1 Investment of service equipment J1 150,000 150,000
30 Balance 150,000
GENERAL LEDGER
2020
18 Partial payment to supplier J1 20,500 0
30 Balance 0
GENERAL LEDGER
Account Title: Notes Payable Account No. 202
2020
June 18 Issuing note in exchange of balance J1 10,250 10,250
account
30 Balance 10,250
GENERAL LEDGER
Account Title: Coco, Capital Account No. 301
2020
June 1 Investment of capital by owner J1 308,000 308,000
30 Balance 308,000
138
GENERAL LEDGER
Account Title: Coco, Drawing Account No. 302
2020
30 Balance 5,000
GENERAL LEDGER
2020
12 Rendered services on installment basis J1 4,300 7,800
30 Balance 37,800
GENERAL LEDGER
Account Title: Advertising Expense Account No. 501
2020
June 3 Payment of advertising J1 2,500 2,500
30 Balance 2,500
GENERAL LEDGER
2020
Balance 6,000
GENERAL LEDGER
Account Title: Utilities Expense Account No. 503
2020
139
June 29 Payment of utility bills J2 2,900 2,900
30 Balance 2,900
GENERAL LEDGER
Account Title: Taxes and Licenses Expenses Account No. 504
2020
June 30 Payment of tax J2 2,000 2,000
Balance 2,000
GENERAL LEDGER
Account Title: Rent Expense Account No. 505
Activity 3
GENERAL LEDGER
2020
June 1 Cash investment by the owner J1 300,000 300,000
2 Payment of business permit J1 10,000 290,000
3 Payment of advertising J1 2,500 287,500
4 Payment of 1-year insurance J1 15,000 272,500
12 Borrowed cash from the bank J2 100,000 352,500
15 Full payment to supplier J2 10,200 342,300
17 Payment of rent J2 5,000 337,300
22 Collection of client’s account J2 5,000 338,300
23 Cash received from services rendered J2 16,500 354,800
25 Payment of utilities J2 5,200 349,600
140
30 Payment of tax J3 1,500 331,100
Balance 331,100
GENERAL LEDGER
2020
30 Balance 41,000
GENERAL LEDGER
2020
June 8 Purchase of office supplies on account J1 10,200 10,200
30 Balance 10,200
GENERAL LEDGER
Account Title: Prepaid Insurance Account No. 104
2020
June 3 Payment of 1-year insurance J1 15,000 15,000
30 Balance 15,000
GENERAL LEDGER
2020
June 3 Purchase of office equipment on account J1 28,000 28,000
26 Purchase of office equipment on J2 30,000 58,000
installment basis
30 Balance 58,000
141
GENERAL LEDGER
Account Title: Furniture and Fixtures Account No. 106
2020
30 Balance 22,000
GENERAL LEDGER
2020
June 3 Purchase of furniture and equipment on J1 50,000 50,000
account
8 Purchase of office supplies on account J1 10,200 60,200
30 Balance 30,000
GENERAL LEDGER
Account Title: Notes Payable Account No. 202
2020
June 26 Purchase of equipment issuing note J2 25,000 25,000
30 Balance 25,000
GENERAL LEDGER
Account Title: Loan Payable Account No. 203
2020
June 12 Borrowed cash from the bank J2 100,000 100,000
30 Balance 100,000
142
GENERAL LEDGER
Account Title: Minchin, Capital Account No. 301
2020
June 1 Investment of capital by owner J1 300,000 300,000
30 Balance 300,000
GENERAL LEDGER
Account Title: Minchin, Drawing Account No. 302
2020
30 Balance 8,000
GENERAL LEDGER
2020
10 Rendered services on account J1 25,000 46,000
30 Balance 62,500
GENERAL LEDGER
Account Title: Taxes and Licenses Expenses Account No. 501
2020
June 2 Payment of business permit J1 10,000 10,000
30 Payment of tax J3 1,500 11,500
Balance 11,500
GENERAL LEDGER
Account Title: Advertising Expense Account No. 502
2020
143
June 26 Payment of advertising J1 2,500 2,500
30 Balance 2,500
GENERAL LEDGER
Account Title: Rent Expense Account No. 503
2020
June 26 Payment of rent J2 5,000 5,000
30 Balance 5,000
GENERAL LEDGER
Account Title: Salary Expense Account No. 504
2020
Balance 8,000
GENERAL LEDGER
Account Title: Utility Expense Account No. 505
2020
June 25 Payment of utility bills J2 5,200 5,200
30 Balance 5,200
144
Section: ________________________________________ Date: _____________________

Prepare a Trial balance
Posting to the ledger is the last part of the recording phase of the accounting process. After
learning this, we shall start summarizing with the preparation of trial balance. An unadjusted trial
balance is the listing of a general ledger account at the end of a reporting period, before any
adjusting entries are made to the balances to prepare financial statements. It will be used as the
starting point for analysing account balances and making adjusting entries. It shows all accounts
with their corresponding balances, segregated into debit and credit columns. The accounts that
should appear are those that are open accounts. And the accounts should appear in order: assets,
liabilities, equity, revenues and expenses. If there are no adjustments, the accounts as reflected in
the trial balance can now be used as the data in preparing the financial statements. if there are still
adjustments, they must be reflected to update the amount of the affected accounts.
If the total debit does not equal the credit column then this would show that there is an
error therefore you will not proceed in preparing the accounting process until the errors are
corrected. However, a “balanced” trial balance does not guarantee the accuracy of the journalizing
and posting.
Steps in preparing Trial Balance

1. Indicate in the heading the details of Trial Balance (Business name, the title of the accounting
work “Trial Balance” and the date of the trial balance). Use the centred text
2. From the ledger, copy the open accounts (accounts with balances). Ignore or skip the account
having ZERO balances.
3. Get the sum of the total debits and credits must be equal, then, double rule their total balance.
Learning Competency with code
Prepare a Trial Balance. ABM_FABM11- IVa-d -32
145
Exercise 1. Journalize, Posting and Preparation of Trial Balance
Directions/Instructions: Journalize, post and prepare the Trial Balance of Kris Brenth, CPA for
the month of March,2020. The half month of Brenth transaction are listed below.
{ Journal entries : 2 points each}
Kris Brenth, CPA

Trial Balance
March 15,2020
Account Title Debit Credit
Cash ₱ 50,000
Prepaid Rent 10,000
Supplies 6,000
Furniture and Fixture 30,000
Land 350,000
Accounts Payable ₱ 44,000
Villa, Capital 450,000
Villa, Drawings 21,000
Salaries Expense 18,000
Rent Expense 7,000
Utilities Expense 3,000
Total ₱ 565,000 ₱ 565,000
During the remainder of March,2020, Brenth completed the following transactions:
March 16 Collected P 40,000.00 cash from a client on account.

17 Performed tax services for a client on account, P12,000
19 Payment of payables to creditor amounted to 10,000
31 Paid employees’ salaries, P 18,000.00
Guide Questions
1. After journalizing, what is the effect of transactions to the trial balance?
2. How much is the total balance of debits and credits of the trial balance?
146
Rubrics for Scoring Trial Balance
Criteria NI Fair Good Excellent
(5) (10) (15) (20)
Concept Does not Does not Understands Shows clear

understand understand concepts in understanding
concepts in concepts in preparing trial of the concepts
preparing trial preparing trial balance very in preparing a
balance very well balance very well with few trial balance
with major errors well with half errors.
errors.
Structure Heading is Correct heading Correct heading Correct
incorrect, Omitted and DOUBLE and DOUBLE heading and
DOUBLE RULE RULE the total RULE the total DOUBLE
in total balance. balance. Listing balance. Listing RULE the total
Most of the listed of accounts of accounts is balance. Listing
accounts is entered with 1-2 is not properly entered of accounts is
incorrectly and properly with -3-4 properly
most of its entered with -3- incorrect entered with
amounts are not in 4 incorrect amounts in its correct
proper debit and amounts in its debit and credit amounts in its
credit column debit and credit column debit and credit
column column.
Computations Total balance of Total balance Total balance of Total balance
debit and credit of debit and debit and credit of debit and
columns are credit columns columns are credit columns
incorrect due to are incorrect incorrect due to are correct and
major errors and due to 3-4 1-2 errors but equal
not equal errors and not equal
equal
147
Answer Sheet
Exercise 1
Mar-
16
17
19
31
Total
148
Exercise 2. ADJUSTMENT-ERROR CORRECTIONS
{Corrected errors :2 points each}
Directions: Please refer to the information below. Journalize and post the transactions to come
up with the correct balances. Then prepare the correct Trial Balance.

Cash ₱ 13,000
Laundry Supplies 10,750
Prepared insurance 7,000
Laundry Equipment 90,000
Accumulated depreciation-Laundry ₱ 18,000
Equipment
Shine, Capital 55,100
Shine, Drawings 12,000
Laundry Revenue 133,000
Salaries & wages Expense 40,000
Rent Expense 3,000
Miscellaneous expense 3,000
Total ₱ 203,750 ₱ 230,300
The Trial balance of Shine Laundry services as of December 31 does not balance because of a
number of errors. While comparing the amounts in the trial balance with the ledger, re- computing
the balances of the accounts, and comparing the posting with the entries, the errors described below
where discovered.
a. The balance of cash was overstated by P 3,000
149
b. A return of P750 of defective laundry supplies were erroneously posted as P 500 credit to
laundry supplies
c. The P 30,000 rent expense was erroneously recorded as P 3,000
d. The balance of accounts payable was overstated by 800
f. Drawing of P 2,000 was not posted.
Answer Sheet
Exercise 2
A. Cash D. Accts. Payable

Less: Overstated Less: overstated
Correct Balance Correct Balance
B. Laundry Supplies E. Drawings

Less: Overstated Add: understated
Correct Balance Correct Balance
C. Rent Expense
Add: understated
Correct Balance
150
Total
Guide Questions
1. What is the proper heading of the above trial balance?
2. After considering the necessary adjustments, how much is the balance of the following
affected accounts?
a. Cash
b. Laundry Supplies
c. Rent expense
d. Accounts payable
e. Drawings
3. How much is the total balance of debits and credits of the trial balance?

(5) (10) (15) (20)
151
errors.
incorrect and and DOUBLE and DOUBLE heading and
omitted DOUBLE RULE the total RULE the total DOUBLE
RULE in total balance. Listing balance. Listing RULE the total
balance. Most of of accounts of accounts is balance. Listing
the listed accounts with 1-2 is not properly entered of accounts is
is entered properly with -3-4 properly
incorrectly and entered with -3- incorrect entered with
most of its 4 incorrect amounts in its correct
amounts are not in amounts in its debit and credit amounts in its
proper debit and debit and credit column debit and credit
credit column column column.
not equal errors and not equal
equal
152
Exercise 3. Preparation of Trial Balance
Directions: Using the balances from Ivanna’s ledger. Prepare a trial balance of Ivanna’s
Bookkeeping Services for January 2020.
Account Name: Cash

Account No. 101 Balance
Re
Date Explanation Debit Credit Debit Credit
f.
2020
Jan-
Capital Investment J1 250,000 250,000
01
2 Purchase of Equipment J1 28000 222,000
4 Payment of 1-year insurance J1 10,000 212,000
Partial payment of purchased on
11 J1 20,000 192,000
Equipment
12 Borrowed cash from the bank J2 105,000 297,000
15 Payment of Supplies on Account J2 10,200 286,800
17 Payment of rent J2 7,000 279,800
22 Collection of Services account J2 5,000 276,800
23 Received cash from services rendered J2 16,500 293,300
25 Payment of utilities J2 5,200 288,100
28 Withdrawal of cash J2 8,000 280,100
Account Name: Accounts Receivable

Date Explanation Ref. Debit Credit Debit Credit
2020
Jan-05 Billed client for services rendered J1 21,000 21,000
Account Name: Office Supplies

Account No. 103 Balance Balance
Purchase of office supplies on
Jan-08 J1 10,200 10,200
account
Account Name: Prepaid Insurance

153
2020
Jan-03 Payment of 1-year insurance J1 15,000 10,000
Account Name: Office Equipment

Account No: 105 Balance
2020
Purchase of office equipment on
Jan-03 J1 28,000 28,000
account
Purchase of office equipment on
26 J2 30,000 58,000
account
Account Name: Furniture and Fixture

2020
Jan-03 Purchase of furniture on account J1 50,000 50,000
Account Name: Accounts Payable

2020
Purchase of furniture and Fixture
Jan-03 J1 50,000 50,000
on account
Purchase of office supplies on
8 J1 10,200 60,200
account
Partial payment of Furniture &
11 J1 20,000 40,200
Fixture
Partial payment of Equipment on
26 J2 30,000 60,000
Account
Account Name: Loans Payable

2020
Jan-12 Borrowed cash from the bank J2 105,000 105,000
Account Name: Ivanna, Capital

Date Explanation Ref Debit Credit Debit Credit
154
Jan-01 Invest.t of capital by owner J1 250,000 250,000
Account Name: Ivanna, Capital

Date Explanation Ref Debit Credit Debit Credit
2020
Jan-01 Investment of capital by owner J1 250,000 250,000
Account Name: Ivanna, Drawings

Account
No. 302 Balance Balance
2020
Jan-26 Withdrawal of cash from the bus. J2 8,000 8,000
Account Name: Service Revenue

2020
Jan-05 Rendered services on account J1 21,000 21,000
10 Rendered services on account J1 25,000 46,000
Account Name: Rent Expense

2020
Jan-26 Payment of rent J2 7,000 7,000
Account Name: Salaries Expense

2020
Jun-18 Payment of salary J2 8,000 8,000
Account Name: Utilities Expense

155
2020
Jun-25 Payment of utility bills J2 5,200 5,200
Guide Questions
1. What is the proper heading of the trial balance above?
2. After extracting the amounts from the ledger to trial balance, how much is the total of
debits and credits?

(5) (10) (15) (20)

errors.
incorrect, Omitted and DOUBLE and DOUBLE heading and
DOUBLE RULE RULE the total RULE the total DOUBLE
in total balance. balance. Listing balance. Listing RULE the total
Most of the listed of accounts of accounts is balance. Listing
accounts is entered with 1-2 is not properly entered of accounts is
incorrectly and properly with -3-4 properly
most of its entered with -3- incorrect entered with
amounts are not in 4 incorrect amounts in its correct
proper debit and amounts in its debit and credit amounts in its
credit column debit and credit column debit and credit
column column.
not equal equal
156
errors and not
equal
Answer Sheet
Exercise
157
References:
Textbook: Fundamentals of Accountancy, Business, and Management 1.
Isabela CPA Review Center Bookkeeping hands out
Joselito G. Florendo, : Fundamentals of Accountancy, Business and Management 1
Valencia, et.al (2010). Basic Accounting 3rd ed. Valencia Educational Supply
Weygandt, J. et .al (20120. Accounting Principles 10th ed. John Wiley & Sons (Asia) Pte. Ltd.
Closure:
In this activity, I learned that in the preparation of trial balance_________________
_________________________________________________________________________
158
Learning Activity sheet
Answer Key
Exercise 1
Journal entries for the remaining days of March , 2020
Mar-
16 Cash ₱ 40,000
Accounts Receivable ₱ 40,000
To record collection of Accounts
Receivable
17 Accounts Receivable 12,000.00

Services Revenue 12,000.00
To record services rendered on account
19 Accounts Payable 10,000.00

Cash 10,000.00
To record payment of Accounts payable
31 Salaries expense 18,000.00

Cash 18,000.00
To record payment of salaries to employees
Kris Brenth, CPA

Trial Balance
March 31,2020
Cash ₱ 62,000
Prepaid Rent 10,000
Supplies 6,000
Land 350,000
Villa, Capital ₱ 450,000
Villa, Drawings 21,000
Rent Expense 7,000
Total ₱ 567,000 ₱ 567,000
159
Exercise 2
P
A. Cash P 13,000 D. Accts. Payable 24,200.00
Less: Overstated ( 3,000 ) Less: overstated (800.00)
Correct Balance P 10,000 Correct Balance P23,400.00
P
B. Laundry Supplies P 10,750 E. Drawings 12,000.00
Less: Overstated ( 250) Add: understated 2,000.00

P
Correct Balance P 10,500 Correct Balance 14,000.00
C. Rent Expense P 3,000

Add: understated 27,000
Correct Balance P 30,000
Shine Laundry Services

Trial Balance
December 31,2019
Cash ₱ 10,000
Laundry Supplies 10,500
Prepared insurance 7,000
Laundry Equipment 90,000
Accum. Depreciation-Laundry
Equipment P 18,000
Shine, Capital 55,100
Shine, Drawings 14,000
Laundry Revenue 133,000
Salaries & wages Expense 40,000
Rent Expense 30,000
Miscellaneous expense 3,000
Total ₱ 226,000 P 226,000
160
Exercise 3
Ivanna Bookkeeping Services

Trial Balance
January 31,2020
Cash ₱ 272,100
Office Supplies 10,200
Prepaid Insurance 10,000
Office Equipment 58,000
Accounts Payable ₱ 60,000.00
Loans Payable 105,000
Ivanna, Capital 250,000
Ivanna, Drawings 8,000
Rent Expense 7,000
Total ₱ 477,500 ₱ 477,500
161

Fundamentals of ABM 1

Uploaded by

Copyright:

Available Formats

Fundamentals of ABM 1

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Fundamentals of ABM 1

Uploaded by

Copyright:

Available Formats

What is the purpose of the document?

What is the purpose of the document?

What are the major topics covered in the document?

What are the major topics covered in the document?

11

LEARNING ACTIVITY SHEETS

Learning Activity Sheet in Fundamentals of Accountancy,

Focal Persons : Inocencio T. Balag, Division EPS- Mathematics, Isabela

Printed by DepEd Regional Office No. 02

Competency Page No.

The Learner Describe the Nature of Accounting 7

The Learner Narrate the History/Origin of Accounting 11

Define External Users and Gives Examples

LEARNING ACTIVITY SHEET

Accounting is the process of IDENTIFYING, RECORDING AND COMMUNICATING

Learning Competency with code:

Define accounting. (ABM_FABM11-IIIa-1)

Directions: Give five examples of economic events in a bakeshop business.

1. Which of the following is NOT a relevant economic event?

2. Which of the following statements describes the accounting process?

3. Which is the most important step in the accounting process?

4. Which of the following is not a step in the accounting process?

LEARNING ACTIVITY SHEET

Background Information for Learners:

Learning Competency with code:

A. Accounting is a process D. Accounting is an information system

Reference for learners:

Fundamentals of Accountancy, Business & Management by Joselito G. Florendo,

LEARNING ACTIVITY SHEET

Background Information for Learners:

Learning Competency with code:

The learner narrates the history/origin of accounting (ABM_FABM11-IIIa-4)

2. Which order of events portray the history of accounting?

4. The double entry system was laid by_______________?

5. The dissemination of double entry was introduced in______________.

_____French revolution-The thorough study of accounting and development of accounting

_____ 14th Century-Double-Entry Bookkeeping The most important event in accounting

Rubrics for Scoring

1. Fundamentals of Accountancy, Business, and Management by: Joselito Florendo

LEARNING ACTIVITY SHEET

Background Information for Learners:

Accounting is called the language of business communicates accounting information to

Learning Competency with code:

2. Raymond is a professor in accountancy in the BS Accountancy program of the University

3. Which of the following is NOT considered an external user of the accounting

5. Management consists of the following

8. Which of the following information in a company’s financial statements concerns

9. In what aspect do creditors and potential investors differ?

10. Why do costumers look at the companies’ financial statements?

Directions: Supply the missing information.

Types of User Definition Example of Users Benefits from

Activity V: Arrange & Identify

Rubrics for Scoring

Reference for learners:

LEARNING ACTIVITY SHEET

So, good luck and enjoy answering the activities!

Explain the varied accounting concepts and principles (ABM_FABM11-IIIb-c-15), solve

Activity 1: Spot the Difference

The New Munoz Bakeshop

1. Rent Expense: __________________________________________